House of Commons Hansard Debates for 27 Apr 1999 (pt 9)

Sir David Madel rose--

Mr. Milburn: The hon. Gentleman has asked a question, and I shall give him the answer. I remind him of what he signed up to at the general election, and I also remind him that the promises that are made at elections should be kept subsequently, whether a party is in government or in opposition.

Mr. Bercow: On a point of order, Sir Alan. Is it in order for the Chief Secretary to criticise my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) for his absence from our considerations when he must be aware that my right hon. Friend is attending a sitting of the Joint Committee on the Financial Services and Markets Bill?

The Chairman of Ways and Means (Sir Alan Haselhurst): Order. The hon. Gentleman has said enough for me to know that that is not a point of order.

Mr. Milburn: It was not even a good try, Sir Alan.

In response to the question of the hon. Member for South-West Bedfordshire, I shall quote back to him what the Conservative party agreed to at the general election and what it put before the British people. Its green manifesto stated:

"We need to balance the freedoms the car provides and its impact on our environment. We need to consider new ways to break the link between desirable economic growth and undesirable traffic growth."

That is what Conservative Members signed up to then, but apparently they do not believe it now.

Several hon. Members rose--

Mr. Milburn: I shall give way to the hon. Member for North Wiltshire (Mr. Gray) and then I really shall make some progress.

Mr. James Gray (North Wiltshire): In the quote that the Minister gave from my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) reference was made to the year 2000, which was a good reason for having the escalator in the first place. By then, we wanted to move towards achieving our Kyoto commitments. Does not the Minister realise that there is almost no elasticity in petrol or diesel usage, and such elasticity as there is will have been achieved by the escalator to date. The year 2000 is in six months from now. Does the Minister agree with me that the escalator has done its job and we have achieved our Kyoto commitments?

Mr. Milburn: No, I do not believe that for a moment. I shall return shortly to precisely that issue--the

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implications of the Opposition's abandonment of their commitments to environmental objectives that were formerly a matter of cross-party consensus. We supported the then Government when they signed up to their commitments at Rio, and thankfully--we are grateful to them for this--they, as the Opposition, supported our commitments when we signed up to them at Kyoto. Now all that seems to have been dissipated.

We have not achieved our aims. That is precisely the point. The number of children with asthma continues to increase, especially in urban areas; pollution continues to increase; dirty lorries continue to have a harmful impact on air quality and the environment. The idea that we can simply wish all that away is the worst sort of political wishful thinking.

Mr. John Burnett (Torridge and West Devon): Will the Chief Secretary give way?

Mr. Milburn: I will make a little progress, if I may. I shall take interventions in a moment or two.

We are not talking just about the issue as it affects urban areas. At least one Conservative Member has mentioned the impact of the fuel duty escalator on rural areas. Let me say two things to the Opposition. First, I agree with the right hon. Member who told the House four years ago:

"I know that a car is often a necessity"--

for those who lived in the countryside, he meant--

"but all motorists must think about the environmental consequences of what they do."--[Official Report, 23 January 1995; Vol. 253, c. 103.]

Again, that was said by the present shadow Chief Secretary to the Treasury. What he agreed with then he apparently opposes now, so both he and the Conservative party are on desperately thin ice when it comes to defending the interests of the countryside and of rural motorists. What is more, the present Government--unlike the last--not only recognise the transport needs of rural areas, but have taken action to meet them.

Mr. Francis Maude (Horsham): Is the Chief Secretary seriously incapable of understanding the difference between an escalator of 5 per cent., introduced when Britain had about the lowest fuel prices in Europe, and an escalator of 12 per cent. operating when we had easily the highest?

Mr. Milburn: I am afraid that the right hon. Gentleman needs to revisit his figures. I shall read them to him shortly.

The truth is that, under the Conservative party, the increase in diesel prices because of the fuel duty escalator was not 5 per cent. at all: it averaged 10 per cent. during the last three years of Conservative Government. If the right hon. Gentleman wishes to bandy figures he is welcome to do so, but, again, he is on desperately thin ice.

It is not even as if the Conservatives stopped supporting the idea of environmental taxes the moment they left office. Quite the reverse. When we took office and announced that we were continuing the escalator policy

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introduced by the Tories--and, indeed, raising it in our first Budget--the Leader of the Opposition told the House:

"we welcome the Chancellor's continued use of tax for environmental purposes."--[Official Report, 2 July 1997; Vol. 297, c. 323.]

The present Government believe that the Leader of the Opposition was right to believe that the taxation system can and, indeed, should be used to achieve our environmental objectives. The only difference between then and now is that the Tories want to disown now what they proclaimed then.

The Tories claim that the reason that the escalator should be abandoned now is that either it has gone too far, or it has done its job. They say that the extra 1 per cent. that the Government have added to it has made it unaffordable, and has wreaked untold damage on, in particular, the haulage industry. That is baloney of the highest order.

As I told the House last week, the price of a litre of diesel has risen less under this Government than under the last. The facts are these, according to the Digest of United Kingdom Energy Statistics. In December 1996, after the previous, Conservative Government's last Budget, the price of a litre of diesel rose to 62.59p. After this Government's first Budget, in July 1997, the price rose again, to 63.44p. The latest figures, for March 1999, show that the price is now 69.76p. The increase has been about 7p per litre. By contrast, under the Conservatives, the price rose by 26p per litre.

I should remind the shadow Chancellor and other Conservative Members of one other fact. The last five duty rises under the Conservatives added, respectively, 10 per cent., 10 per cent., 13 per cent., 10 per cent. and 7 per cent. to the price of diesel. In other words, the party that introduced the escalator--and is responsible for it having the greatest impact on fuel prices--now opposes it. A party that adopts such a position deserves to be called hypocritical. But that is not all.

There are two major implications of the Conservatives' latest policy twist. First, Conservative Members' claim to support a cleaner environment has been exposed for exactly what it is: warm words with absolutely no substance. Although the Tories supported the Government when we made our legally binding obligations at Kyoto, their abandonment of the escalator leaves them professing support for our environmental objectives, but opposing the means of achieving them. Presumably they believe that environmental improvements will simply look after themselves.

I should remind Opposition Members today, as I reminded them last week, of what the former Chancellor of the Exchequer, the right hon. and learned Member for Rushcliffe (Mr. Clarke), had to say about that issue. He said: