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Mrs. Gorman: Will the hon. Gentleman give way?
Mr. Davey: I am more than happy to do so.
Mrs. Gorman: That is very sweet of the hon. Gentleman. I should like to direct his attention to the wonderful speech made earlier by the hon. Member for Workington (Mr. Campbell-Savours), who pointed out that road charges simply force the driver on to other roads for which there are no charges, thereby moving congestion to another area.
Mr. Davey: The hon. Lady refers to a point made by the hon. Member for Workington, but his analysis was
relevant only to the proposals on road user charging that were put forward by the Conservative Government in respect of motorway tolls. The road user charges proposed in the Greater London Authority Bill cover a larger area and would affect all roads, not only trunk roads or motorways.
Mrs. Gorman: He should have been here.
Mr. Davey: I was simply taking up the hon. Lady's analysis and account of the remarks made by the hon. Member for Workington. That argument applies only to large trunk roads and motorways, whereas, if the hon. Lady cares to read the Minister's speeches in the Standing Committee on the Greater London Authority Bill, she will see that the Government's proposals on road user charges would apply to an entire area and not to specific roads, so the problem she identifies would not occur.
Kali Mountford: The hon. Gentleman was making a case in which road usage in urban areas was set against the problems of rural areas. Does he recognise that some people in rural areas moved out of urban areas because they could afford to and that they have changed the social environment in rural areas; and that within rural society is a poorer group of people who have become dependent on cars because of the demise of bus services and who buy clapped-out old bangers that put into the atmosphere dreadful emissions which we all have to breathe and which affect greenhouse gases, whether they are emitted in rural or urban areas? Is it not also necessary to improve the transport infrastructure so that we can get people who cannot really afford to run cars on to buses?
Mr. Davey: I had hoped that I had made it clear that I agreed with the hon. Lady on that point.
I was addressing the question whether there were alternative charging mechanisms or taxes available to the Government that would enable them to achieve their environmental objectives but would not require an ever-rising fuel escalator. Road user charges are one system that the Government should consider, as are vignettes, and I hope that the Minister will tell the Committee that they are actively considering those options.
Another option to which the Government appear to be sympathetic is lower taxes on environmentally friendly fuels. I should like the Government to publish a strategy on how they intend to introduce environmentally friendly fuels over the next 10 years. It is important that the Government should direct that effort, because they need to give those who are developing those fuels a clear indication of the likely tax system over the next 10, 15 or 20 years. There are huge costs of introducing such fuels, such as those of developing supply networks throughout the country, and the Government have to give a signal as to which fuel they intend to give their backing. There are many potential fuels that the Government could support: we have heard about LPG, but there are other clean-fuel technologies, such as cell fuels, in development and it might be possible to use them in standard motorised vehicles within the next five to 10 years.
Mr. John Whittingdale (Maldon and East Chelmsford):
This has been a good debate, with several well-argued speeches from both sides of the Chamber. I begin on a conciliatory note. I warmly welcome the Government's decision to reduce the rate of duty on road fuel gas. The previous Conservative Government first cut the duty by 15 per cent. in 1995 and by a further 25 per cent. in 1996 in recognition of the fact that the use of liquefied petroleum gas and compressed natural gas reduces the level of almost all air pollutants. I am glad that this Government are continuing that policy by introducing a further cut in this Budget.
There is still some way to go. This cut in duty will undoubtedly help to encourage people to switch, but a clear disincentive remains in the form of a lack of refuelling points. I was concerned to learn recently that British Gas intends to close eight outlets, including one at Bradwell in my constituency. Another inhibiting factor is uncertainty about the future. Consumers and fleet managers need assurances that the favourable differential will be maintained. I therefore hope that the Minister will respond to requests from the industry, as mentioned by my hon. Friend the Member for Cotswold (Mr. Clifton- Brown), that the Government commit themselves to maintaining a favourable regime for at least the next five years.
I am afraid that there is much less agreement between us on the increase in petrol duty. Many hon. Members referred to the fact that the fuel duty escalator was introduced by the previous Government in 1993. It was justified at the time as being necessary to complete Britain's strategy to curb carbon dioxide emissions. Several hon. Members--including the Chief Secretary--quoted the then Chancellor of the Exchequer, my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), who said that criticising the tax plans while also supporting the international agreement would be
When the escalator was introduced, petrol prices in the United Kingdom were generally lower than in the rest of Europe. It was certainly never intended to use the escalator indefinitely; yet, as many of my hon. Friends have pointed out, the Government have not only continued to use the escalator, but increased it. By pushing it up to 6 per cent. and introducing three increases in two years, they have added 12p in tax to the cost of a litre of petrol. As a result, we have the highest petrol prices in Europe, if not the world. I challenge the Minister to name any country where petrol prices are higher than those in the United Kingdom.
Labour Members' arguments that the increases are necessary if we are to meet our targets for reducing greenhouse gas emissions do not hold water. Only about 20 per cent. of carbon dioxide emissions are accounted for by the transport sector, compared with 30 per cent. by the energy sector. The Government's climate change document states that, under the previous Government, there was a significant shift away from more carbon-intensive fuels, such as coal and oil, towards lower or zero-emission fuels such as gas and nuclear energy; yet, under this Government, a moratorium has been imposed on the building of any more gas-fired power stations, and nuclear power generation has been rejected. Already, a number of applications to build cleaner, gas-fuelled power stations have been turned down and, with some nuclear stations approaching the end of their lives, the consequence of the Government's policy will be to increase emissions, far outweighing any reductions achieved by raising the price of petrol.
The Government's policy is not the most effective way of cutting CO 2 emissions from the transport sector. As my hon. Friend the Member for South-West Bedfordshire (Sir D. Madel) said, the greatest contributor to reducing emissions from cars has been the improvement in technology. In the past five years, toxic emissions from vehicles have fallen by a third. However, that is not because people are driving less; traffic on the roads continues to grow. Improvements in technology have steadily cut the level of emissions, with the prospect of a further 25 per cent. fall in emissions from new cars in the next 10 years.
As several hon. Members have pointed out, particularly those who represent rural areas, such as my hon. Friends the Members for South Holland and The Deepings (Mr. Hayes) and for Bury St. Edmunds (Mr. Ruffley), there is no alternative to the car for many people in this country. As the National Farmers Union has said, people living and working in the countryside are doubly hit by tax rises. Not only is their own vehicle use affected, but they will have to pay the increased transport costs that will be imposed on consumer prices.
Research for the Automobile Association has demonstrated that increases in fuel tax impact disproportionately on households that rely on cars for their essential journeys, especially rural and suburban households with limited access to public transport services. Women, the disabled and those in receipt of state pensions and other benefits are particularly badly hit.
In 1995, in the debate on the fuel duty increases, the hon. Member for Bristol, South (Dawn Primarolo), now the Paymaster General--I am delighted to see her in her place--said:
"sailing dangerously near to hypocrisy."--[Official Report,30 November 1993; Vol. 233, c. 939.]
It is worth noting that another integral part of the tax plans announced at that time was the imposition of value added tax on fuel. However, when it opposed that measure, the Labour party conveniently forgot my right hon. and learned Friend's warning about hypocrisy.
"People living in rural areas will be badly affected. They will find it difficult to understand why they must pay for the Government's taxes while receiving little in return in public transport. Pitching . . . the tax rise as an environmental measure is cynical".--[Official Report, 23 January 1995; Vol. 253, c. 99.]
Does that remain her view?
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