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Mr. Deputy Speaker (Mr. Michael Lord): With this, it will be convenient to discuss the following amendments: No. 27, in clause 8, page 3, line 26, after 'centimetres,', insert
'a vehicle falling within subparagraph (1) of paragraph 1A, or a vehicle falling within subparagraph (1) of paragraph 1B,'.
'(6) At the end of paragraph 1 of Schedule 1 to the Vehicle Excise and Registration Act 1994 there shall be inserted--
"1A.--(1) Any vehicle which has during the previous 12 months been certified as achieving an emissions figure of 140g CO2/km shall have a general rate of £100.
(2) The Secretary of State shall by regulations establish the methodology by which the emissions figure referred to in sub-paragraph (1) is to be calculated, and any such regulations shall be subject to annulment by either House of Parliament.
(3) Subparagraph (1) shall have effect in relation to any licence taken out for a period beginning on or after 1st January 2000.".'. No. 29, in page 3, line 39, at end insert--
'(7) At the end of paragraph 1 of Schedule 1 to the Vehicle Excise and Registration Act 1994 there shall be inserted--
"1B.--(1) Any vehicle which has been registered during the previous 12 months and which has been certified as using Liquefied Petroleum Gas as a fuel shall have a general rate of £100.
(2) The Secretary of State shall by regulations establish the methodology by which the process of certification referred to in sub-paragraph (1) is to be carried out, and any such regulations shall be subject to annulment by either House of Parliament.
(3) Subparagraph (1) shall have effect in relation to any licence taken out for a period beginning on or after 1st January 2000.".'.
Mr. Jack: This debate gives us an opportunity to review the logic of the Government's proposals on vehicle excise duty and carefully to examine their credentials on the fiscal encouragement that they may be contemplating--[Interruption.]
Mr. Deputy Speaker: Order. I am sorry to interrupt the right hon. Gentleman, but there is far too much background noise in the House. We are conducting a debate.
Mr. Jack: We have an opportunity also to consider the fiscal encouragement that the Government are giving to the use of fuels for motor vehicles, particularly liquefied petroleum gas, which have several environmental attributes to which I shall refer in a moment. I thank the Society of Motor Manufacturers and Traders and the Calor Group plc for their assistance in preparing material for the new clause and the amendments. I tabled them because the Government received support for their proposal in the Budget and the subsequent Finance Bill to introduce a new vehicle excise duty regime. They reduced the VED for cars of 1100 cc or less by £50, but increased the VED on all remaining vehicles by a counter-balancing amount so that the measure would effectively be tax-neutral.
Mr. Fabricant: I am sure that my hon. Friend was not fooled, as so many were, into thinking that the Government were being generous in their dispensation. Is he aware that even as small a car as the Fiat Punto does not qualify for the 1100 cc lower vehicle excise duty dispensation?
Mr. Jack: I suppose that I should declare an interest: I have one of those cars, so I am entirely aware of my hon. Friend's point, with which I shall deal.
The 1100 cc cut-off was chosen quite arbitrarily. Magically, one supposedly reaches a tax-neutral position by taking £50 from the VED of the 2.9 million vehicles affected, and adding £50 to the VED for other cars. It is intriguing, therefore, that in year one of the change announced in the Red Book, the Government gained £14 million. I tabled amendments on the VED, because in the press release issued at the time of the Budget, the Government said:
- "New cars registered from Autumn 2000 will be subject to a VED system based principally upon their rate of carbon dioxide emission, to encourage the take-up of more fuel-efficient vehicles."
I found it odd that they were jumping the gun on the outcome of their consultation document "Consultation on reform of Vehicle Excise Duty to ensure a cleaner environment", which was issued in November, although I do not disagree with such an objective.
In paragraph 2.3 of that document, the Government say:
"The UK also has a domestic aim of cutting emissions of carbon dioxide, the main greenhouse gas, by 20 per cent. by 2010 relative to 1990."
So, a clear environmental objective was stated right at the start of the consultation exercise.
In paragraph 2.4, the Government go on to point out that
"Recently, a voluntary agreement has, however, been concluded between the European Commission and car manufacturers to reduce average emissions from new cars to 140 grammes of CO 2 per kilometre by the 2008, a cut of about 25 per cent. on the current average".
From the two statements, one would have thought that, at that juncture, the Government would have wanted to do all that they possibly could to encourage the take-up of fuels that will reduce carbon dioxide, and thereby encourage those who are to meet the remarkable voluntary agreement by 2008. As I shall demonstrate, my amendments give the Government an opportunity to encourage such developments over the next 12 months. They are entirely consistent with the Government's objectives in their consultation exercise.
Amendment No. 29, which applies the introduction of the proposals to liquified petroleum gas, prays in aid the comment at the end of paragraph 2.5 of the consultation document. It draws our attention to the problems of fine particulates PM 10s, which have a demonstrated link with respiratory and cardiovascular disease, and to oxides of nitrogen, which can damage the lungs and play a part in summer smog episodes. Those emissions currently result from the use of petrol engines, which, as I shall demonstrate, are well tackled by the use of liquified petroleum gas. The amount of encouragement through the VED arrangements for the uptake of vehicles powered by such fuels is zero. It is the lack of consistency that persuaded me in the first place to table the new clause and the amendments.
It is important to consider the detail because we then find that, of the 10 cars with the lowest carbon dioxide emissions, only five have an engine size of less than 1100 cc; the rest are diesel-engine vehicles. Secondly, the best performing vehicles have carbon dioxide emissions of between 129 and 139 g per kilometre. Current technology is already incorporated in some cars; they will meet the 2008 figure. Under the present VED arrangements, there is nothing fiscally to encourage the uptake of such vehicles.
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Cars with engine sizes of less than 1100 cc have carbon dioxide levels ranging from 129 g to a massive 172 g per kilometre. It is odd that the arbitrary use of 1100 cc means that the Government are encouraging vehicles with carbon dioxide emissions that are not at the top end of environmental friendliness; they are at the bottom end--if I can put the matter in terms of good and bad. An examination of the logic of the current VED proposals shows that they seem to encourage the wrong kind of cars. My amendments give the Government the opportunity to correct that damage.
Although I have prayed in aid of my arguments the 2008 agreement of 140 g of carbon dioxide per kilometre, the amendments may encourage the Government to consider the fact that other cars are already in existence that perform markedly better than the 172 g that I quoted but whose engine size is above 1100 cc. The Ford Ka at 155 g, or the Nissan Micra at 151 g are two good examples of vehicles that might be encouraged. I shall not read out the exhaustive list of cars that meet the 140 g output--the subject of my amendments--but it includes the Peugeot 106 diesel, the Volkswagen 1.9 diesel mark 3, the Audi A3 diesel and the Ford Focus 1.8 diesel. Many other diesel cars, because of their relative fuel efficiency, already meet the 140 g output of carbon dioxide per kilometre. Sadly, however, they do not benefit from the Government's arguments on VED on cars with engines of 1100 cc or below.
We should consider alternative fuels. I shall apply the same logic as I have already used, but to cars powered by liquefied petroleum gas. The reference to engine capacity is purely arbitrary; it does not take proper note of the logic of trying to encourage more environmentally friendly cars. Liquefied petroleum gas is good on carbon dioxide; it deals effectively with benzine emissions, which can cause particular health risks. It deals well with particulates and PM 10s, with sulphur dioxide, oxides of nitrogen and ozone emissions. I will not list all the medical benefits, but heart disease and respiratory problems will certainly be affected by a reduction in those emissions.
In fairness, the Government are backing their own policy of encouraging the uptake of liquefied petroleum gas. I am advised that the Deputy Prime Minister drives a car that is powered by that fuel--as are most of the Government's car and despatch agency vehicles. Sadly, however, by the end of 1998, just under 8,000 vehicles were powered by that fuel source.
I can think of two reasons why such an obviously environmentally friendly fuel has not enjoyed a greater uptake, and they are addressed by my amendments, which deal with the tax relief arguments.
There is no well-established infrastructure for the refuelling of cars with liquified petroleum gas.
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