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Mr. Fabricant: Liquid hydrogen is less explosive than petrol.
Before we all get carried away with diesel, may I point out to my right hon. Friend the Member for Fylde that it is in many ways dirtier than non-leaded petrol. Whereas non-leaded petrol can produce long-term pollution of the environment, diesel with its particulates is particularly known for causing asthma, especially in schools located near main roads.
I ask the Government to consider the amendments tabled by my right hon. Friend. I wait with interest to hear how the Government justify their claim that the original
measure was an environmentally friendly move. Even if they deny that it would raise £40 million for the Revenue, will they not come clean and say at least that it was yet another example of Labour spin?
Mr. Loughton:
I support my right hon. Friend the Member for Fylde (Mr. Jack) and new clause 10.
At the outset, I should declare an interest. A few months ago, together with the hon. Member for Peterborough (Mrs. Brinton), I was given a spin round Brands Hatch in the aforementioned Vauxhall Vectra at 116 mph. When we got out, my make-up was rather less smudged than hers. The car certainly revealed no loss of power compared with petrol-driven racing cars. It is the only liquified petroleum gas-driven racing car in the world and I gather that it is currently second in the league tables. There is certainly no difference in that respect.
Mr. Fabricant:
Is not a larger engine required and is not fuel consumption therefore greater?
My hon. Friend the Member for Lichfield (Mr. Fabricant) was right when he said that this is a chicken-and-egg problem. I do not want to go into the environmental and health benefits of road fuel gases, as my right hon. Friend the Member for Fylde has done, but the problem is that there are only about 135 points of service for road fuel gases even though this country has about 19,000 service stations. There are difficulties with access.
There is an LPG service station in my constituency, but there are no others for miles around. The key to the success of LPG--and, indeed, of compressed natural gas--is infrastructure and making tax concessions to create that infrastructure. Installing an LPG pump at the average service station costs in excess of £30,000; installing the infrastructure to enable compressed natural gas to be pumped costs much more. The key to the installation of such pumps is businesses realising that there is a market for the product and the key to that market is company car fleets.
About one car in 10 in this country is a company car, but 50 per cent. of all new cars are company cars. We need to give tax incentives for company car fleet operators to convert their cars to road fuel gas or to buy road fuel gas-driven cars in the first place. At the same time, we need to give tax incentives to the manufacturers of those cars so that they will produce them at rates that are competitive with those of the diesel and fossil fuel-driven cars about which we have heard so much.
One of the few measures that we welcomed in the Budget was the 29 per cent. reduction in taxation on road fuel gases. We found out about it only in the small print and it was a great shame that the Government did not sound off about it rather more. That good measure followed another good measure that was introduced by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) in a Budget about five years ago. He reduced the duty on road fuel gases by 25 per cent.
Not enough has been done despite those two, proportionately large moves being made. The duty on road fuel gases in this country is still higher than in any other European Union country. Certain European countries, such as Belgium, do not tax road fuel gases or
LPG at all. We need to make a bold move on taxation--not only on fuel duty, but to enable people to install the pumps and the infrastructure necessary to make such products available.
Getting sales of unleaded petrol off the ground was a great success of the previous Government. They succeeded only because they made a bold move--slashing the duty on unleaded fuel--and because such fuel was readily available in service stations. A new pump head had to be put on the same sort of tank and, in many cases, people had to put an extra widget on to the engine--a 30-minute job. However, the job is far more substantial on road fuel gas-fired vehicles, which is why tax allowances are required to speed things up.
The industry would tell the House that it needs at least a five-year stability plan to show that the Government, whoever they are, are committed to promoting tax incentives and much wider use of road fuel gas-fired cars.
Mr. Edward Davey:
I generally agree with what the hon. Gentleman and his hon. Friends are trying to do. Does he agree that other clean fuel technologies, such as fuel cell technologies, should also be promoted by the tax incentives he proposes?
Mr. Loughton:
I entirely agree, but those technologies are still some way off. In fact, 100 per cent. tax allowances are available in some circumstances, including for equipment for scientific research to develop technologies. We need immediate action to promote the use of road fuel gases over the next few years. The Kyoto targets are not many years off, and by the time that new technology comes in, it will be too late to achieve them.
By promoting the use of road fuel gases, we would increase the residual value of cars. Dual fuel-driven cars are a current option, but conversion is much more expensive. If drivers are guaranteed to be close to a pump using road fuel gases, the costs will be brought down, and there are also economies of scale. Grants are available from the Energy Saving Trust for conversion, but such cars would be cheaper if the fuel were more readily available.
There are also implications for noise pollution. Companies such as the John Lewis Partnership and Safeway have converted or bought vehicles that operate on LPG because they are quieter as well as more environmentally friendly, which enables deliveries to shops in residential areas at anti-social times. They can reach the shops more quickly, avoiding adding to the traffic congestion that costs British industry so much.
The new clause would give more of a kick-start to the greater use of road fuel gases than merely reducing duty. It is no use reducing the duty on fuel if people cannot get the stuff. Manufacturers and operators of petrol stations will not make a capital commitment unless they are convinced that there will be some payback over, say, five years. New clause 10 sends a firm message to the industry that change will not cost much in the short term, but will have an enormous payback in the medium term, not only in revenue, but in savings from the promotion of the health of the nation.
Mr. St. Aubyn:
I support the new clause tabled by my right hon. Friend the Member for Fylde (Mr. Jack).
During the Committee stage, I, too, proposed the encouragement of the use of liquid petroleum gas. One of the key movers of that project, the British Oxygen Company, is based in my constituency. Everyone involved in the project welcomed the reduction in duty rather quietly announced after the Budget, but was concerned that it was not enough. We need more petrol stations providing road fuel gas outlets. In Committee, we heard startling statistics about how far one might drive by filling up with LPG. Of course, it depends on how big the car's tank is, but we need many more LPG outlets if the idea is to take off.
A car converted to LPG requires expensive charges for substantial checks that it is roadworthy. Cars carrying the new fuel must be safe, and the cost of the fuel tank is another hurdle in the way of wider use. The basic cost of tanks is perhaps between £500 and £1,000, but safety checks add greatly to the cost, wiping out the benefit of Government grants. I urge the Minister to give that some thought when she responds to the debate.
If this conversion is to happen it will require further research. I regret the fact that the hon. Member for Peterborough (Mrs. Brinton) is not present. During the Committee, her thoughts were rather skimpy, to say the least, and tonight, they are not to be had at all. That is regrettable, because the heart of the research into LPG engines is at Perkins Engines in Peterborough. That company was the subject of a serious takeover bid, and it is well known that its new owners are reviewing whether this research project should go ahead.
12.15 am
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