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Mr. Norman: Before he moves on from that point, will the Minister make it quite clear to the House whether he is saying that, in his view, if the oil price were to fall again it would be right for the Government to bring back the fuel duty escalator?

Mr. Meacher: No. I am not saying that. [Hon. Members: "Oh"] It is a matter of semantics. What I said was that we would certainly have to consider the matter again, not in terms of a fuel duty escalator, because I accept that where the international oil price is bobbing around like a cork on the sea it is absurd to put in place an escalator provision. However, it makes sense to look at the issue on a case-by-case basis, including whatever is appropriate to ensure that motorists realise the environmental externality in their costs.

In July, the Government launched a 10-year plan for transport, building on the integrated transport White Paper and delivering a £180 billion investment package to modernise the nation's transport system, to cut congestion and deliver real choice. I would point out to the House that that is a 42 per cent. increase in real terms in spending compared with the past 10 years.

Mr. Campbell-Savours: Will my hon. Friend give way?

Mr. Meacher: I shall give way again shortly.

The plan, which will deliver improvements across all modes of transport, is designed to tackle the legacy that we inherited of under-investment, fragmentation and short termism which have resulted from 20 years or more of neglect of our transport system.

Mr. Dafydd Wigley (Caernarfon): Does the Minister understand that what is worrying hauliers so much is that

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their businesses are collapsing because of unfair competition. They are looking for a level playing field. Businesses in the United Kingdom are being undermined by hauliers from continental Europe who have the advantage on them. In those circumstances, have the Government taken any initiative with the European Union to see whether in a common market it is possible to have a common approach to the level of taxation so that there is a level playing field?

Mr. Meacher: There has been consideration of what is called a "eurovignette" and there are other proposals to try to achieve that. The UK, of course, has been involved. We wish to ensure the continuing competitiveness of our haulage industry. There is a competitiveness section within the road haulage forum which is looking precisely at the facts and figures to ensure that we achieve that competitiveness. I ask the right hon. Member for Caernarfon (Mr. Wigley) to wait for the Chancellor's pre-Budget report, as that is the point at which the Government will make a formal statement in answer to his perfectly fair points.

Several hon. Members rose--

Mr. Meacher: I will not give way for the moment.

In formulating our approach to transport, the Government have been very conscious--rather more so than Conservative Members--of our environmental targets. Road transport is one of the major sources of air pollution, especially in urban areas. The transport sector is also the fastest-growing source of greenhouse gas emissions. Climate change, arguably, is the biggest environmental challenge that we face globally.

That is not a trendy intellectual scenario of the middle-distance future; it is with us now. In the last few weeks, we have seen the worst flooding in Kent and Sussex in living memory. Two years ago, the east midlands experienced the worst flooding for a century. France experienced the most destructive storm of the last century which killed dozens of people and caused losses running into billions. That is paralleled by similar disasters on an even greater scale across the world. I repeat that measures to reduce carbon dioxide emissions from transport will need to play a central role in helping the UK to meet its international and domestic climate change objectives.

The real lesson of the fuel crisis, in my view, is the need for us to reduce our overdependence on oil and to switch to a greater use of renewable sources of energy. The Government have already invested in a number of measures to support the uptake of cleaner alternative fuels and technology, including low rates of duty on road fuel gases. A low rate of vehicle excise duty on electric vehicles offers significant incentives for drivers to switch.

Through my Department's powershift programme--whose budget was increased to £10 million in March--we are offering more and more grants to help those who wish to purchase gas and electric vehicles. Under the 10-year plan, the Government are committed to doubling the amount spent on cleaner vehicle initiatives by 2003-04.

Mr. David Heath (Somerton and Frome): I am most grateful to the Minister, who is making a careful and

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reasoned case. However, will he accept that there is a world of difference between targeted measures which attack congestion and overuse of vehicles in urban areas--where there are real alternatives in terms of public transport--and the situation in rural areas where there is no alternative, where people are simply penalised and where they are the least able to pay that imposition?

Mr. Meacher: I am extremely concerned about the situation in rural areas, for which I carry a responsibility within Government. [Interruption.] I entirely accept that the--[Interruption.]

Mr. Deputy Speaker: Order. I am sorry to interrupt the right hon. Gentleman, but I must refer to the constant barrage of interruptions. The Minister is being generous in taking interventions. It will not help hon. Members who are seeking to catch my eye later in the debate if they continue their interruptions.

Mr. Meacher: The hon. Member for Somerton and Frome (Mr. Heath) makes a fair point. He knows that we have begun to address this matter by spending £170 million on rural bus services, which has produced 1,800 new and improved bus services. He may dissent--and I accept that it is not enough--but it is a great improvement on what went before. If he can bear to wait for the rural White Paper, the Government will come forward with further proposals which seek in an innovative and valuable way to try to address the particular problems of rural areas.

Those fiscal measures are programmes sponsored by the Government and will increasingly make a major contribution to our climate change programme. In addition, under the voluntary agreement which, I am pleased to say, we have secured between the EC and motor manufacturers in the western world, CO 2 emissions from new cars will be reduced by no less than 25 per cent. over the next eight years. Together with changes made by the Government to company car taxation and vehicle excise duty, that is expected to produce annual savings of 4 million tonnes of carbon by 2010, which is one ninth of the target that the UK must meet.

Mr. Owen Paterson (North Shropshire): Further to the Minister's reply to the hon. Member for Somerton and Frome (Mr. Heath), does he accept that in rural areas it is impossible for the excessive fuel duty increase to be passed on to customers? Will he therefore apologise to my constituent Mr. Martin Edge, who used to be president of the Road Haulage Association in Shropshire? In 1997, Mr. Edge employed 30 people, but last week he lost his business and house.

Mr. Meacher: Of course, I am sorry to hear of that case. I hope that the hon. Gentleman told his constituent the truth that the causes of the current problem go deep. They are not immediate and go back to the effects of the fuel duty escalator, which began under the previous Government and, in conjunction with other external factors, proved excessive and led to the results to which the hon. Gentleman referred. We are trying to address the

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matter, and the Chancellor will shortly respond with a series of measures that will begin to address the matter fundamentally.

The Government continue to reform taxation and reward those who drive cleaner, more fuel-efficient vehicles. Cleaner fuels are becoming more widespread, thanks largely to lower fuel duties, which we introduced on fuels such as ultra-low sulphur diesel and petrol and gas fuels such as liquefied petroleum gas and compressed natural gas. In addition, owners of cars with engines up to 1200cc benefited from a £55 cut in vehicle excise duties in the last Budget. More than 2 million vehicles benefited from that tax cut. From March 2001, all new cars will go into one of four bands based on their rate of CO 2 emissions. Under the new system, 95 per cent. of new cars will pay up to £70 less tax, with a total reduction of £400 million. From April 2002, company cars will be taxed on the basis of their CO 2 emissions, which should deliver savings for company car drivers choosing cars that are more fuel-efficient.

There is a clear decision to be made between the parties in this debate. In the Opposition we have a party that, during its term in office, devastated public transport in rural areas, concreted over more of the countryside than any Government before or since and abandoned the fuel duty escalator on the first whiff of populism. It is now looking to get behind what it calls a people's revolt and stir it up--that from a party that likes to see itself as the party of law and order. The Opposition are now so desperate for votes that they will promise anything--even 3p off the price of petrol--without regard to how that will be paid for or the damage that it will do to the environment.

On this side of the House, the Government have published a plan to invest £180 billion in Britain's rundown transport system, have already directed nearly £200 million into improved transport in rural areas and are determined to maintain a fair and proper balance between taxation and the needs of the countryside and the environment. The battle lines are clear, and I commend the Government amendment to the House.


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