Select Committee on Environmental Audit Minutes of Evidence

Examination of Witnesses (Questions 50 - 79)



  60. It is how government joins them up together, is it not?
  (Mr Timms) I defend the way we are joined up. We work very closely indeed with DETR over things like the Climate Change Strategy which does contain a lot of information about projections for CO2 emissions. I think that has been a model of joint working.

  61. I take that but I am just thinking that if we were really being successful in this, then presumably we would know exactly how much extra energy was being used, for example to produce ultra low sulphur petrol. Did you take account of the extra energy which would then be contributing to the extra global warming which you would need to produce the ULSP? Did you take that into account?
  (Mr Timms) I did not receive a set of data weighing up that compared with the CO2 benefits of the GDI technology.

  62. If we had generally an environmental appraisal would you not have received that? Or could we look for that the next time round?
  (Mr Timms) What is clear is that there will be significant environmental benefits from the introduction of ULSP and that is the justification for the incentive we have introduced. I am not sure that it is necessary to do a point by point calculation about every single measure if it is clear that the measure we are talking about is a beneficial one.

  63. How do you know if you have not actually looked? If you have not actually taken account of the extra energy used for manufacturing, how would you know that it was clear that this was the most environmentally favoured option to take? It is not a criticism, this is really to get at how much we do it.
  (Mr Timms) Indeed. From my understanding the point is that on balance in CO2 terms, as well as in sulphur terms, we can expect the change to be beneficial. I take the point entirely. There are some serious issues here. For example, with the next generation of the low sulphur petrol there are real concerns about whether the amount of energy that is required to produce it would outweigh the benefits of introducing it and I know that research is being done at the EU on that subject specifically. The point I am making is that it is not for the Treasury necessarily to be doing all this.

  64. It is the Treasury which is actually making the recommendation.
  (Mr Timms) Some of the work will be done in the EU, some of it will be done elsewhere in government and we have access to that in reaching our decisions.

  65. We can look forward to the whole balance sheet on environmental factors being included in a more sophisticated version when we get the next document, can we?
  (Mr Timms) What I should be interested to know is how the Committee feels about this form of the table, which is a considerable improvement as a result of what the Committee said previously on what we had before and if there is specific further information you would like to see then let us know about it and we shall certainly have a look at that.

  66. The Committee would like the full environmental appraisal with the methodology and everything else so we can actually make an informed decision. That is really what I think the Committee would wish to see. The question is: to what extent has that already been provided to us?
  (Mr Timms) It depends what you mean by "full environmental appraisal". I am not quite clear.


  67. The Government has set out a model way of doing environmental appraisals with which we are all familiar. We have discussed at endless length with endless Green Ministers a model way of doing it. You have not done it on this occasion, have you?
  (Mr Timms) What I would say is that we have supplied the information to the Committee and to members of the public.

  Joan Walley: Environmental appraisal is different.


  68. You have supplied conclusions. You have not supplied the reasoning.
  (Mr Timms) It is the case—and I am being prompted to remind me—that we do assess all budget measures for their environmental impacts using the guidance which has been set out by DETR.

  69. Can we see that? Can we see the papers on the environmental appraisal which was done which you are now mentioning?
  (Mr Maxwell) I know that the Government has made available the documentation about environmental appraisal of measures it has introduced.

  70. Not to this Committee. We have seen nothing in the nature of an environmental appraisal of the changes in fuel duty which have taken place. Remember you did this back in 1999. You stopped the fuel duty escalator in 1999 so there has been plenty of time for you to do a thorough analysis exposed to the public on exactly why you are dropping the fuel duty escalator.
  (Mr Timms) What I would suggest is that not increasing fuel duty is not changing things. I know you have some difficult things and you carry out an environmental impact assessment of them.

  71. I would say it is changing things dramatically.
  (Mr Timms) No, not changing duty is not something which—

  72. Come on. You are playing semantics here. The Government has altered its view about the role of the fuel duty escalator. There is no doubt about that. That is a very significant change in a very sensitive area. Why have you not done a proper full environmental appraisal and published it?
  (Mr Timms) I do not think I am just playing semantics. An automatic annual increase in fuel duty clearly has a significant environmental effect which one could discuss but that is the change which needs to be assessed. Leaving duty unchanged in real terms, which is what we did in the budget this year, is not something we are going to talk about as having a significant environmental impact.

  73. I think most people would disagree with you. Clearly if you are changing policy, that is a major event. We will want to know the reasons for it.
  (Mr Timms) We have set out the reasons for it.

  74. That is a proper environmental appraisal. How can you quantify it? What is the effect? What other policies are affected by it and so on? Surely you want to do this thoroughly. This is the whole point about an environmental appraisal. It is not just presenting conclusions in half a page of the Pre-Budget Report, it is exposing the logic behind it, the reasoning behind it. You have had plenty of time to do it since you changed the policy in 1999.
  (Mr Timms) I simply say that we have amply set out the thinking that we have been through which has led us to the conclusions that we have announced and published. The difference between us is about our understanding of what the nature of the decision about the fuel duty escalator was. We are not any longer going to have automatic annual increases.

  75. Surely we agree that there has been a change in policy.
  (Mr Timms) There has indeed.

  76. That is right. What we are saying is that every policy of this kind which has major environmental effects must have an environmental appraisal underneath it, sustaining it, discussing it and justifying it. That is Government policy.
  (Mr Timms) I am being reminded that we have sent a memorandum to the Committee on this topic specifically, presumably after I appeared here a year ago. Maybe we should have a further look at that and if there is further information you would like us to provide—

  Chairman: You have changed the policy again. You have now brought in other things like low sulphur content fuel and so forth. The policy is developing but we have seen nothing to justify that other than a very small statement of your conclusions in the Pre-Budget Report. That is not consistent with a proper environmental appraisal as anybody understands it.

Joan Walley

  77. If you were doing a true environmental appraisal we should be able to take into account the recommendations, for example, that organisations such as Greenpeace would want to look at in terms of how you perhaps move away from dependence on oil to other options instead, so you could look at the whole picture. It is how you take that environmental process so we can measure, so we can audit and measure what effects policy options and subsequently the choice of policy which is adopted, what effect that has overall on the environment. That is the situation we want to move towards.
  (Mr Timms) I simply reiterate that I think we are providing the information which is needed to make those assessments. If there are specific things that the Committee feels are missing, by all means draw our attention to them as you have done in the past and we shall certainly have a look at them.

Mr Loughton

  78. Let us change the subject. Let us go onto technology and where we are going to be in five or ten years' time. Some people would say that our discussions so far, interesting though they be, particularly in the last five minutes, are tinkering because in five or ten years' time we shall have hydrogen fuelled cars and other forms of technology which will make discussions about different types of fossil fuel taxation rather redundant. What is the Government actually doing about looking to the longer term to encourage these far more environmentally friendly forms of fuelling car transport?
  (Mr Timms) That is the background to the alternative fuel challenge which the Chancellor announced in the Pre-Budget Report. I agree with you that I think we can look to very substantial improvements in fuel efficiency as a result of technological change, some of which, as in the case of hydrogen fuelled cars, may well be very radical indeed. We are also taking a number of smaller steps. For example, in the new company car tax arrangements we have discounts on the tax payments for electric cars for hybrid petrol/electric cars as well, which are a couple of models we have now seen on the market. We are taking steps within the company car tax system as well and that is potentially very significant because in company car fleets you are getting relatively small numbers of organisations making very significant decisions about purchasing large numbers of vehicles. If we can set the incentives right to encourage people to choose the most beneficial technology in company car fleets, there is the potential for us to have a very substantial and wider beneficial impact as well.

  79. What specific tax incentives has the Chancellor given to the development of hydrogen fuelled cars?
  (Mr Timms) I guess that could be one of the candidates for the alternative fuel challenge, if people want to propose that in response to the challenge the Chancellor has given. What we have said is that once we have received all the responses to the challenge and made an assessment of them, we would hope to be in a position to introduce significant duty incentives for the most promising one or ones at the time of the next Budget.

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