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Mr. Page: I suggest that my hon. Friend recommends to his constituents that they take a hire car in Scotland. That would probably be a lot cheaper.
Mr. Deputy Speaker: Order. I suggest that we come back to the matter in hand.
Mr. St. Aubyn: That firm ensures that the environmental impact is much reduced, because it takes
all those cars up north in one go. The impact is reduced even further because it has chosen to invest in LPG vehicles. That works because it can manage to make the journey, as there are enough fuel stations where LPG is available. It enables the mobile office to move with the business executive, which is not possible with a hire car. To extend that service, many more fuel points are required around the country. That is why we shall listen carefully to the Economic Secretary's response.
Ms Hewitt: I am delighted to hear from the right hon. Member for Fylde (Mr. Jack), and from the other hon. Members who spoke with such enthusiasm about cleaner cars and cleaner fuels. We share their enthusiasm, and the Government are taking practical and consistent action to encourage cleaner cars and cleaner fuels. I shall say a little about that action before I explain why the new clause is unnecessary and the amendments are impracticable.
As several hon. Members have said, in the Budget in March, my right hon. Friend the Chancellor cut the duty on road fuel gases by 29 per cent. As a result, the duty differential is now the largest in Europe, and the duty on road fuel gas is only a fifth of that on diesel. We have committed ourselves to maintaining that differential for the lifetime of this Parliament, which will help to give confidence and stability to those who invest in the infrastructure of road fuel gas filling stations, and to those who are buying or converting to gas-powered vehicles.
Let me also mention--as others have not yet done so--the Energy Saving Trust's powershift programme. The programme provides grants to help cover the additional purchasing costs of gas-powered vehicles, and to help those who wish to convert their vehicles to gas or change their vehicles. In some instances, it can meet up to 75 per cent. of conversion costs. We have also taken steps to encourage the use of road fuel gas by company car fleets. Since 6 April 1998, the extra cost of enabling company cars to run on road fuel gas has been disregarded in the calculation of the company car benefit taxable on employees.
It is clear that there are already substantial incentives for people to buy or convert to gas-fuelled vehicles. As the right hon. Member for Fylde pointed out, the problem has not been encouraging people to use gas; it has been the lack of an infrastructure providing filling stations at which they can buy it.
Mr. Loughton:
The Minister specifically mentioned a tax change in the Budget in 1998 relating to the capital cost of company cars. That, of course, was down to an amendment to the Finance Bill tabled by Conservative Members. Can the Minister tell us how many cars have converted to road fuel gas since that date?
Ms Hewitt:
It is still quite a small number. As I was about to say, and as several hon. Members have already said, the problem is that the country does not yet possess an infrastructure providing filling stations where drivers can easily buy road fuel gas. But--as hon. Members have said today, and as was said in Committee--both Shell UK and BP have made the welcome announcement that they will implement major investment programmes to ensure that there is a network of LPG sites on forecourts throughout the United Kingdom. Shell UK has announced a £10 million investment programme designed to make LPG available to
Mr. St. Aubyn:
In Committee, I asked the Minister what proportion of Shell's total forecourt investment the £10 million represented in the coming year. She did not have the figures then; does she have them now?
Ms Hewitt:
That is really a matter for Shell rather than for me, but I shall try to write to the hon. Gentleman.
The welcome investment in infrastructure to which I have referred is happening without the proposed special capital allowances. Although I share the objective of the right hon. Member for Fylde, I consider it unnecessary to introduce such allowances. In my view, this is a deadweight proposal; but we will continue to monitor the take-up of road fuel gas, and will keep the case for additional incentives under review.
I should mention in passing that special capital allowances for gas-powered vehicles and gas refuelling points would doubtless have to be notified to the European Commission as a state aid, and would probably also have to be notified to the code of conduct group on business taxation. That may well interest several Conservative Members.
I hope that, for those reasons, the right hon. Member for Fylde will feel able to withdraw his motion. If he does not, I will ask my hon. Friends to oppose it.
I can just imagine what the motor manufacturing industry would say if we were to accept the amendment and to demand that it puts in place brand new information systems, to be up and running and linked to the VED system by 1 January 2000.
Mr. Jack:
Does the Minister not agree that information is already available about the carbon dioxide outputs of the vehicles that I listed? The information is there now and presents no barrier whatever to the achievement of the proposal in my two amendments.
Ms Hewitt:
The right hon. Gentleman is missing the point. New cars have been tested for carbon dioxide emissions since 1997, but the information has not been collated in a form that can be used to calculate VED rates. As I have said, manufacturers, the Driver and Vehicle Licensing Agency and computer suppliers are working together to put the systems in place, but they will not be in
The right hon. Gentleman and other hon. Members referred to the initial step that we took in the Finance Bill following last year's pledge by the Chancellor. We introduced a reduced rate of £100 VED for existing cars with engines up to 1100 cc. We did that not at a revenue gain, but at a revenue cost of £85 million, as the Red Book makes clear.
Of course, engine size is not the same as carbon dioxide emissions. It is not a perfect equivalent for environmental damage and pollution. None the less, it is the best available proxy for fuel efficiency that we have and can obtain from the information that is held by the licensing authorities. The measure has given a tax cut to drivers of nearly 2 million smaller cars.
Amendment No. 29 would extend the reduced rate to vehicles that are certified as using LPG as a fuel. I have referred to the incentives that the Government have already introduced to encourage such cars, but, as the right hon. Member for Fylde knows, many of the vehicles that use LPG can run on both gas and petrol. Indeed, according to DVLA records, only some 960 currently registered vehicles run solely on road fuel gas. About 10 times that number--some 9,300 bi-fuel vehicles--can run on either gas or fuel. As the amendment stands, bi-fuel vehicles that are capable of running on gas, but may not for most of the time, would none the less qualify for the reduced rate. Clearly, that would not make sense.
I hope that the right hon. Member for Fylde will support the Government's practical steps to encourage the conversion to road fuel gas and the purchase of smaller and cleaner cars, and agree to withdraw his new clause. If not, I must urge my hon. Friends to vote against it.
Mr. Jack:
Although I appreciate the Minister putting on record some of the Government's efforts in the sector, much of what she said in rejecting perhaps technically flawed amendments was not consistent, although she used the word "consistent" at the beginning of her remarks. I understand that there is a legal requirement, if not in United Kingdom law, certainly at European level, to capture and to retain carbon dioxide data on car emissions. Therefore, that information is available and we have the voluntary agreement, which I mentioned and which is mentioned in the Government's consultation document on graduated VED.
It would not be difficult for a motor manufacturer--I mentioned a number of those--to furnish the Government with that information, which such manufacturers are, I understand, legally required to do.
I pray in aid a footnote to a briefing from the Society of Motor Manufacturers and Traders, which states:
I was worried by the hon. Lady's argument--which she based entirely on carbon dioxide emissions--that the Government favour a VED that would encourage
environmental improvement, as she not only said that she supports liquified petroleum gas, but prayed in aid a slightly weaker hand when describing its merits.
When the Government make their proposals, the fleet will comprise cars of many different ages. It will be interesting to see how the Government cope with pre-1997 cars, on which data may not be available. I therefore fear that the second strand of the hon. Lady's argument, on consistency, may be difficult for the Government to maintain. Nevertheless, we shall have to await the outcome of the consultation exercise to discover how they will deal with that.
I hope that, when the consultation exercise is concluded, the Government might find some way of rewarding people whose cars are either dual fuel or run solely on LPG, as such cars offer enormous benefits. I am sorry that the hon. Lady had not consulted the Department of Health on the matter. I am sure that, given a chance, the Chief Secretary to the Treasury--who is now in the Chamber, and is a former Health Minister--would have whispered in her ear not sweet nothings, but hard information on how wider introduction of LPG could reduce the number of those who have to go to hospital because of heart or respiratory conditions.
The hon. Lady also prayed in aid the work of certain fuel companies in creating an LPG infrastructure. There is some scepticism about just how widespread that network will be--I quoted figures of 400 forecourts; 200 depots, over a four-year period; and the conversion to LPG of 6,000 company cars. On the net tax effect of my proposals, I quoted £607,000. However, if such proposals were implemented, billions of pounds could be saved in the health budget. It is sad that the Government are not prepared to perform a very straightforward cost-benefit analysis when considering the amendments.
I am grateful for the support for the amendments that I have received from my hon. Friends, some of whom spoke on the matter with great knowledge. However, I acknowledge that the amendments may have technical deficiencies, and that the Government themselves may not have the data necessary to apply the proposals. This debate has been useful, perhaps not only in teasing out the Treasury's thin thinking on the matter, but in encouraging it to do more work on it.
"It was not a legal requirement to collect carbon dioxide data from new passenger cars before 1997".
Admittedly, therefore, it might be difficult to visit my argument upon pre-1997 cars. However, clearly, the hon. Lady's argument falls like a pack of cards when applied to cars manufactured after 1997, as that information is available, and using it would be entirely consistent with the Government's own policy.
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