MINUTES OF PROCEEDINGS RELATING TO THE REPORT
MONDAY 13 MARCH 2000
Members present:
| Mr Hilary Benn | Mrs Louise Ellman
|
| Mr Andrew F Bennett | Mr Clifford Forsythe
|
| Mr Tom Brake | Mr James Gray
|
| Christine Butler | Dr Stephen Ladyman
|
| Mr John Cummings | Mr Bill Olner
|
| Mr Brian Donohoe | Mr George Stevenson
|
| Mrs Gwyneth Dunwoody | |
Mr Andrew F Bennett was called to the chair,
The Committee deliberated.
Draft Report [UK Climate Change Programme], proposed by
the Chairman, brought up and read
Ordered, That the Report be read a second time, paragraph
by paragraph.
Paragraph 1 read, as follows:
Climate change is perceived by Governments as a serious environmental
threat. The impacts around the world will be many and varied and
there is an acceptance that the challenge of reducing emissions
of greenhouse gases must be dealt with in a global manner. At
the third Conference of the Parties to the Framework Convention
on Climate Change (FCCC) in Kyoto in December 1997, limits were
agreed for emissions of greenhouse gases from developed countries.
As part of the Kyoto Protocol and a subsequent agreement within
the EU, the UK has a target of reducing a basket of six greenhouse
gases by 12.5% from 1990 levels by 2010. In addition to this target,
the Labour Party committed itself in its 1997 manifesto to reducing
emissions of carbon dioxide to 20% below 1990 levels by 2010.
Amendment proposed, in line 1, to leave out from the word
"is" to the word 'The' and insert the words "the
most serious environmental threat that we face today. This has
been acknowledged by Governments and scientists alike.".—(Mr
Tom Brake.)
Question put, That the Amendment be made.
The Committee divided
| Ayes, 1 | Noes, 11 |
| |
| Mr Tom Brake | Mr Hilary Benn
|
| Christine Butler |
| Mr John Cummings |
| Mrs Gwyneth Dunwoody |
| Mr Brian Donohoe |
| Mrs Louise Ellman |
| Mr Clifford Forsyth |
| Mr James Gray |
| Dr Stephen Ladyman |
| Mr Bill Olner |
| Mr George Stevenson |
Paragraph agreed to.
Paragraphs 2 - 13 read and agreed to.
Paragraph 14 read, as follows:
For targets to be worthwhile, they should be both credible and
ambitious. The two targets do not fulfil these requirements: the
Kyoto target is certainly credible but not stretching or ambitious
and the 20% CO2 target is not currently credible. If
the Kyoto target is relatively easily met and the 20% target is
not being taken seriously, then we risk developing a complacent
attitude to reducing greenhouse gas emissions. This would probably
result in a period of inaction for the next 10 years or so which,
it must be remembered, is projected to be a period of increasing
emissions. If then, as the Government repeatedly told us, much
more ambitious international targets will be agreed for the period
after 2010, the UK could be caught without the necessary long-term
framework to deliver continuing reductions. The less than total
commitment to this target serves to undermine the climate change
strategy and reinforce the public's scepticism about the need
for action. Government Ministers and Departments have shown
a lack of clarity in respect of the target of reducing carbon
dioxide emissions to 20% below 1990 levels by 2010. This must
be remedied as it risks undermining the Climate Change Programme.
If the Government is to reach its 20% target, there must be a
commitment from all Government Departments and Ministers to its
achievement.
Amendment proposed, in line 14, at end insert the words
"We note that the Government has put forward quantified measures
to achieve a 17.5% cut in CO2 emissions by 2010. We
encourage the Government to remain committed to the 20% target
and clearly identify policies and measures that will, without
unnecessary uncertainty, close the gap of 2.5%.".—(Mr
Tom Brake.)
Question put, That the Amendment be made.
The Committee divided
| Ayes, 1 | Noes, 11 |
| |
| Mr Tom Brake | Mr Hilary Benn
|
| Christine Butler |
| Mr John Cummings |
| Mrs Gwyneth Dunwoody |
| Mr Brian Donohoe |
| Mrs Louise Ellman |
| Mr Clifford Forsyth |
| Mr James Gray |
| Dr Stephen Ladyman |
| Mr Bill Olner |
| Mr George Stevenson |
Paragraph agreed to.
Paragraph 15 read and agreed to
A paragraph-(Mr James Gray)-brought up, read as follows:
Failure to achieve sectoral targets must not be used as a
reason for removing or reducing the exemptions for
the Climate Change Levy offered by the Chancellor to IPPC industries.
Question put, That the paragraph be read a second time.
The Committee divided
| Ayes, 2 | Noes, 10 |
| |
| Mr Brian Donohoe | Mr Hilary Benn
|
| Mr James Gray | Mr Tom Brake
|
| Christine Butler |
| Mr John Cummings |
| Mrs Gwyneth Dunwoody |
| Mrs Louise Ellman |
| Mr Clifford Forsyth |
| Dr Stephen Ladyman |
| Mr Bill Olner |
| Mr George Stevenson |
So the Question was negatived
Paragraphs 16 - 26 read and agreed to.
Paragraph 27 read, as follows:
There remains much uncertainty as to the impact that the fuel
duty escalator had upon people's behaviour and, therefore, emissions
of carbon dioxide. The long-term elasticity of response to transport
fuel price increases is particularly uncertain and the effectiveness
of the fuel duty increases was, until recently, reduced by falling
oil prices. The Treasury told us that "the escalator over
the period 1996-2002 would save between 2 to 5 million tonnes
of carbon a year by 2010." This is a large range for the
estimate of the effect of a well-established policy. We were concerned
that the escalator had been in operation for more than 5 years
but that its impact was not well understood. Inevitably, the poor
understanding of the escalator's impact left the Government open
to accusations that fuel duty was simply being used as a milch
cow by the Treasury to raise revenues.
Amendment proposed, in line 10, at end insert "This
impression is rather confirmed by the year-on-year increases in
revenue from fuel duties predicted in the Budget Red Book. If
the Government expected the fuel duty escalator to change behaviour,
then presumably they would also expect the revenue from fuel duty
to decline year-on-year."
and new paragraph:
"The Chancellor of the Exchequer's claim that the fuel duty
escalator has been cancelled to be replaced by hypothecation of
revenues raised from any increase above inflation seems to us
fundamentally flawed:
(i) He fails to make it clear whether he expects higher-than-RPI
increases in fuel duty to be an aid to changing behaviour. The
Government must clarify its thinking on this point.
(ii) Hypothecation of revenues in the way he proposes risks misleading
the tax-payer. The tax may well be raised from people other than
those who will benefit from any resulting public transport improvements.
Rural drivers, for example, will suffer, while town dwellers by
and large will be the main beneficiaries. Anyhow, there is no
reason to presume that the amount of money raised will cover the
cost of public transport improvements desired. What is more, if
such public transport improvements are necessary or desirable,
the Government ought to be funding them out of the mainstream
taxation. We are therefore opposed to the idea of hypothecation
on principle.".—(Mr James Gray.)
Question put, That the Amendment be made.
The Committee divided
| Ayes, 1 | Noes, 11 |
| |
| Mr James Gray | Mr Hilary Benn
|
| Mr Tom Brake |
| Christine Butler |
| Mr John Cummings |
| Mr Brian Donohoe |
| Mrs Gwyneth Dunwoody |
| Mrs Louise Ellman |
| Mr Clifford Forsyth |
| Dr Stephen Ladyman |
| Mr Bill Olner |
| Mr George Stevenson |
Paragraph agreed to.
Paragraph 28 read, as follows:
This point was further emphasised by the way the revenues
from the escalator were used. As the escalator was ramped up over
the years, the revenue from fuel duties increased from £14
billion in 1994-95 to £23.5 billion in 1999-2000. There has
been little additional spend on transport during this period and
there was a consensus amongst witnesses that if people were to
change their transport behaviour as a result of increased fuel
prices, better alternatives were also necessary. The increased
revenue from fuel duty would seem to be an ideal source of additional
funding for developing a better transport system. As Mr Meacher
acknowledged:
"If people are being expected to pay significantly more,
and that is what is involved in a fuel duty escalator, they would
be much more willing to do so if the money is used ... in a manner
which provides them with an alternative for increased use of their
car."
Question put, That the paragraph stand part of the Report.
The Committee divided
| Ayes, 11 | Noes, 1 |
| |
| Mr Hilary Benn | Mr James Gray
|
| Mr Tom Brake | |
| Christine Butler | |
| Mr John Cummings | |
| Mr Brian Donohoe | |
| Mrs Gwyneth Dunwoody | |
| Mrs Louise Ellman | |
| Mr Clifford Forsyth | |
| Dr Stephen Ladyman | |
| Mr Bill Olner | |
| Mr George Stevenson | |
Paragraph 29 read, as follows:
Fuel duty is providing large amounts of revenue and is starting
to impact more heavily on some car users, particularly the poor,
elderly and those in rural areas. The ending of the fuel duty
escalator means that these people will no longer face automatic
year-on-year increases in their motoring costs. However, the abandonment
of the escalator also brings a loss of certainty about future
fuel prices and this will undoubtedly mean that people have less
incentive to act in a fuel-efficient manner. For example, changes
in Vehicle Excise Duty have encouraged people to opt for smaller,
more fuel-efficient cars and this message was reinforced by the
knowledge that fuel prices would continue to rise in real terms.
This reinforcement no longer exists. We agree with the Government
that the public and political acceptability of fuel duty increases
will be assured only if some of the revenues are recycled to give
direct benefits to transport users. We urge the Government
to make use of the link which it has created between fuel duty
increases and transport spending at the earliest opportunity.
Another Amendment proposed-(Mr James Gray)-in paragraph
29 to leave out from the word "users" in line 10 to
the end.
Question put, That the Amendment be made.
The Committee divided
| Ayes, 1 | Noes, 11 |
| |
| Mr James Gray | Mr Hilary Benn
|
| Mr Tom Brake |
| Christine Butler |
| Mr John Cummings |
| Mr Brian Donohoe |
| Mrs Gwyneth Dunwoody |
| Mrs Louise Ellman |
| Mr Clifford Forsyth |
| Dr Stephen Ladyman |
| Mr Bill Olner |
| Mr George Stevenson |
Question put, That the paragraph stand part of the Report.
The Committee divided
| Ayes, 11 | Noes, 1 |
| |
| Mr Hilary Benn | Mr James Gray
|
| Mr Tom Brake | |
| Christine Butler | |
| Mr John Cummings | |
| Mr Brian Donohoe | |
| Mrs Gwyneth Dunwoody | |
| Mrs Louise Ellman | |
| Mr Clifford Forsyth | |
| Dr Stephen Ladyman | |
| Mr Bill Olner | |
| Mr George Stevenson | |
Paragraphs 30 and 31 agreed to.
Paragraph 32 read as follows:
Aviation forms a hole in international efforts to reduce greenhouse
gas emissions. As the Consultation Paper on the Climate Change
Strategy notes, "air transport is a rapidly expanding source
of emissions." In April 1999, the IPCC concluded its special
report on aviation and the global atmosphere. They concluded that
air transport was responsible for around 3.5% of total global
warming effect and that the contribution from aircraft arose not
only from carbon dioxide but also from nitrogen oxides and other
pollutants injected directly into the upper atmosphere. The total
contribution of aviation to global warming is predicted to increase
rapidly as growth in air transport is running at around 6% per
annum and this will outstrip any reduction arising from technical
innovation. Fuel for aviation is currently exempt from taxation
under the Chicago Convention and this fact, taken with the failure
to include emissions from international flights in countries'
emissions inventories, means that aviation is an ever growing
problem. Progress at an international level on allowing taxation
of aviation fuel has been extremely slow and, we believe, will
continue to be so. We welcome the Government's commitment to
examine the case for taxes on aviation fuel or other climate-related
charging measures but believe it is essential that any measures
are introduced at a global level.
Amendment proposed, to leave out from the word "problem"
in line 10 to the end and insert "However, we do not believe
that the exemption of aircraft fuel from taxation should be changed
for three main reasons:
(i) There is no evidence that an increase in the cost of aircraft
fuel would necessarily result in a reduction in numbers of flights.
It is more likely to be passed onto consumers in higher ticket
prices.
(ii) Even if the linkage between price and flight mileage reduction
could be proved, we are not clear that restricting the use of
travel by air which would result from a punitive tax would necessarily
be desirable from an environmental or social standpoint.
(iii) It would anyhow only be viable if it were applied globally.
There is no prospect of that, and so should not be considered.
Airlines might otherwise be given an incentive to fly to refuel
in those countries offering cheaper fuel."-(Mr James Gray.)
Question put, That the Amendment be made.
The Committee divided
| Ayes, 1 | Noes, 11 |
| |
| Mr James Gray | Mr Hilary Benn
|
| Mr Tom Brake | |
| Christine Butler | |
| Mr John Cummings | |
| Mr Brian Donohoe | |
| Mrs Gwyneth Dunwoody | |
| Mrs Louise Ellman | |
| Mr Clifford Forsyth | |
| Dr Stephen Ladyman | |
| Mr Bill Olner | |
| Mr George Stevenson | |
Paragraph agreed to.
Paragraphs 33 - 68 agreed to.
Paragraph 69 read as follows:
Although the levy will not be introduced until April 2001,
we note the comments of Lord Marshall on future rates of the tax:
"a clear signal should be given of the long-term direction
of policy, with changes in the rate of tax made in a gradual and
predictable way." Some witnesses suggested that various policies,
including the climate change levy, be "ratcheted up"
and that the proposed level of levy was too small to have much
impact. In the same way that the fuel duty escalator gave a clear
signal to car users about their behaviour, progressive increases
in energy taxation would give a plain message to industry about
its need to reduce energy use. With such a policy, firms can invest
in energy-efficiency measures with confidence.
Question put, That the paragraph stand part of the Report.
The Committee divided
| Ayes, 11 | Noes, 1 |
| |
| Mr Hilary Benn | Mr James Gray
|
| Mr Tom Brake | |
| Christine Butler | |
| Mr John Cummings | |
| Mr Brian Donohoe | |
| Mrs Gwyneth Dunwoody | |
| Mrs Louise Ellman | |
| Mr Clifford Forsyth | |
| Dr Stephen Ladyman | |
| Mr Bill Olner | |
| Mr George Stevenson | |
Paragraph agreed to.
Paragraphs 70 - 93 agreed to.
Question put, That the Report be the Fifth Report of the
Committee to the House.
The Committee divided.
| Ayes, 10 | Noes, 2 |
| |
| Mr Hilary Benn | Mr Tom Brake
|
| Christine Butler | Mr James Gray
|
| Mr John Cummings |
| Mr Brian Donohoe |
| Mrs Gwyneth Dunwoody |
| Mrs Louise Ellman |
| Mr Clifford Forsyth |
| Dr Stephen Ladyman |
| Mr Bill Olner |
| Mr George Stevenson |
Ordered, That the Chairman do make the Report to
the House.
Resolved, That the Report be the Ninth Report of
the Committee to the House.
Ordered, That the Chairman do make the Report to
the House.
Ordered, That the provisions of Standing Order No.134
(Select committees (reports)) be applied to the Report.
Several papers were ordered to be appended to the Minutes
of Evidence.
Ordered, That the Appendices to the Minutes of Evidence
taken before the Committee be reported to the House.
[Adjourned till Wednesday 15 March at 10
o'clock.
|
