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Tom Brake (Carshalton and Wallington): I suspect that the Minister is about to leave the subject of LPG. Before he does, will he reassure one of my constituents that there should be no safety concerns about new LPG refilling plants being opened close to residential properties?
Mr. Jamieson: I can give the hon. Gentleman that reassurance. LPG, properly fitted in a refuelling station or a vehicle, is probably safer than petrol. Many people ask whether the tank, which unfortunately tends to look like a bomb, is safe. The tank is built to resist considerable pressure, so it is much safer in the event of an accident than the conventional petrol tank. In road accidents, the ignition of the petrol and the fire that ensues causes many deaths. People can be assured that with both CNG and LPG, the likelihood of the tank rupturing and the fuel escaping is less.
Mr. Syms: I agree with what the Minister said about safety, but there is a knotty little issue in that vehicles are not allowed to go through the channel tunnel with full LPG tanks, whereas caravans with full calor gas tanks are allowed to go through. Have further representations been made on that point?
Let us consider what outcomes we want. What is the ultimate destination? As I said, our longer-term emphasis will be on low-carbon technologies, given the potential impact of climate change on our environment. Security of supply is also important, since fossil fuels such as gas and oil are a finite resource, and we cannot rely on them to power our transport system for ever.
That is the destination, but how do we get there? The simple answer is that there are many different routes to achieving what we want. Cleaner conventional fuels will still have a vital role to play. For example, discussions are taking place in Europe about making effectively zero-sulphur petrol and diesel widely available in member states, potentially by 2005. Such fuels should help manufacturers to introduce a new generation of fuel-efficient engines. Many manufacturers are developing hybrid electric vehicles that use two types of power source together to maximise the benefits of each. For example, a petrol or diesel engine and electric motor can be combined to maximise fuel efficiency and reduce emissions. The system can offer twice the fuel efficiency of a conventional vehicle, with only half the carbon dioxide emissions, with air pollution benefits in the most polluted areas.
Mr. Miller: As far back as 1993, Ricardo's of Shoreham showed the Science and Technology Committee a prototype hybrid engine designed for heavy vehicles. Unfortunately, it has not yet found its way on to the road, even though it is a leading piece of technology. Is my hon. Friend satisfied that the fiscal incentives are in place to promote such technology?
Mr. Jamieson: The fiscal incentives are in place. It is unfortunate that the technology tends to be more expensive and the market tends to be conservative. It is difficult to persuade the purchasers of vehicles to make the appropriate changes. Having driven one of the hybrid vehicles, I can tell my hon. Friend that it was very satisfactory. It delivered about 60 miles per gallon, whereas a similar petrol vehicle would probably deliver about 35 mpg. Hybrid vehicles are already commercially available in the UK. Toyota and Honda offer hybrid electric petrol vehicles for sale, and other manufacturers are likely to follow. The Government are supporting the introduction of hybrid vehicles with purchase grants of £1,000 through the PowerShift programme.
Hydrogen and biofuels, which can, crucially, start to decouple mobility from climate change, will also form part of this journey. They are practical and can replace or be blended with fossil petrol and diesel in existing engines.
For biofuels, the carbon saving, compared with fossil fuel, is highest where the biofuel is made with waste or recycled material and less when the feed stock is specially grown, using fertilisers and energy. We intend this country to be a leader in biofuel technologies. The Chancellor launched the greener fuels challenge in last year's pre-Budget report, to identify the most promising fuels for special tax treatment. That led to the 20p per litre reduction in duty for biodiesel in the Budget. That will bring forward biodiesel produced in the UK with used vegetable oil.
I am aware of the arguments that there should be an even larger duty cut for biodiesel, to open the way for biodiesel made from virgin rapeseed, and that biodiesel duty should be on a par with LPG or CNG. The issue was fully dealt with in the Finance Bill debate.
As my hon. Friend the Financial Secretary explained, the prime purpose of the low duty on LPG and CNG is to help combat air-quality problems, whereas experts generally agree that biodiesel is not better than fossil
Looking yet further ahead, we have the firm prospect of electric-drive vehicles running on fuel cell technology. That opens the way for a clutch of benefits: higher vehicle efficiency; better in-car amenities; zero-tailpipe emissions; lower carbon emissions; and inherently low carbon emissions when the hydrogen is renewably generated.
We want this country to be out in front in the development of all those new fuels and the associated technologies. The potential for job and wealth creation is significant, and the United Kingdom is well placed to benefit, with a strong manufacturing base and expert design engineering capabilities. All this activity is supported by about 50 universities and other centres of excellence in the United Kingdom. They are involved in providing education and advanced research into all aspects of vehicle, powertrain, component and materials engineering.
In November, my Department and the Department of Trade and Industry will produce a discussion document"Powering future vehicles"in which we will set out our strategy not only for promoting the development, introduction and take-up of fuel cell and other new technologies, but for ensuring that the United Kingdom automotive industry is fully engaged in the technology.
I hope that I have explained the importance that the Government place on cleaner fuels as a means of supporting our environmental objectives in the short and longer terms. I have touched on many issues in my speech, which, I hope, will provoke a strong and healthy debate today.
Mr. Malcolm Moss (North-East Cambridgeshire): May I begin by offering an apology to you, Madam Deputy Speaker, and the House for my not being able to stay for the full length of the debate to hear the winding-up speeches? I am afraid that that is a result of the late change in business and constituency commitments, which I cannot alter at this stage.
We welcome this debate, even if the subject is not particularly pertinent to the moment. It is not acceptable for the Home Office to claim pressure of work to put off the drugs debate that was earmarked for today. Obviously, the Government do not have much good news to promote, hence this subject has been lifted off the shelf for this morning's debate.
Mr. Miller: I agree with the hon. Gentleman that the drugs debate is very important, but two major surveys have shown that air quality is the biggest single issue in the minds of my constituentsthey live in a petrochemical manufacturing town.
May I connect the correct security concerns with today's debate by asking the Minister whether he is aware that there are only eight oil refineries in Great Britain? If last year's fuel crisis taught us anything, it is that it does not take much to prevent distribution from those refineries, thus causing a national fuel shortage. What assessment has the Minister made of the threat of terrorist action against some or all those refineries? Can he assure us that the same security measures that are being put in place at reservoirs and nuclear power stations are being used to protect those refineries from threat?
To return to today's business, I assure the Minister that the Opposition welcome any sensible measures that encourage greener fuels and greener vehicles. We were disappointed that, despite promising in 1997 they would be "the greenest Government ever", it took this Government more than three years to announce a tax cut for ultra-low sulphur petrol, but we welcome their eventual decision. Members will recall that tax breaks introduced by Conservative Governments helped to encourage the shift away from leaded petrol to unleaded, and we welcome the fact that the Government are following in our footsteps. Can the Minister tell us whether the Government plan to go even further and encourage the production of no-sulphur fuels? What fiscal measures are the Government considering to speed the introduction of that even greener fuel?
We also welcome the tax cuts that the Government have made to compressed natural gas and liquefied petroleum gas. My hon. Friend the Member for Ashford (Mr. Green) was one of the first to suggest in the previous Parliament that tax on LPG and CNG should be cut to the lowest minimum EU level. The Minister should give the House a firmer assurance than he did in response to an intervention made by my hon. Friend the hon. Member for Leominster (Mr. Wiggin) about the Government's ambition to maintain the tax on those clean fuels at that minimal level for the long term, not just until 2004, as the Chancellor has suggested. Converting cars to run on cleaner fuels can be a costly and bureaucratic business, as we all know, and consumers need to know that they are making an investment that the Government will defend in the longer term.
The Minister is, no doubt, aware that the number of vehicles that run on LPG, and particularly CNG, is still very small in this countrya point made by my right hon. Friend the Member for East Yorkshire (Mr. Knight). As the Minister confirmed, about 50,000 vehicles run on LPG in this country, but there are nearly 10 times that number in Holland. What strategy do the Government have to encourage a greater take-up of LPG at petrol stations, particularly in rural areas?
I thank the Minister for expanding on the measures that the Government intend to introduce to promote biofuels, which do not add to global warming. The EU proposes that 2 per cent. of road transport fuels should be biofuels by 2005. Does he intend to meet that target and, if so, how? Again, my hon. Friend the Member for Ashford proposed that biodiesel should be taxed at the same rate as road fuel gases. Will the Minister consider such a proposal?
Looking even further ahead, Conservative Members are keen to encourage a whole range of alternative-fuel vehicles, such as dual fuel, solar, electric and fuel-cell powered cars. We proposed a cut in vehicle excise duty for those vehicles, and I hope the Minister will put pressure on the Chancellor to consider such a cut in his next Budget. Hon. Members will be aware that the Government have decided to change the current system and band VED for new vehicles according to four CO 2 emissions rates. I understand the sentiment behind that policy decision, but why should it be based only on CO 2 emissions? Would it not be better to discourage all air pollution by basing VED rates on the total emission standards of vehicles? I should be grateful for an explanation of the Government's thinking on that decision, especially in relation to company cars.
As the Minister will accept, company cars are among the most environmentally friendly vehicles on our roads. The Government plan to abolish mileage allowances and use CO 2 emissions to calculate taxation levels that will hit the pockets of those who need to use their cars for business. For example, a sales manager running a 1.9 litre diesel car, which costs about £21,000 to put on the road, and who drives 25,000 business miles a year, will have to pay between £800 and £950 of extra tax a year. That stealth tax is certainly not helping British manufacturing and industry.
Is not the Minister aware that, for many, a company car is a vital tool for business and public transport is simply not an option? I hope that the Government change their mind and realise that the job of company car fleet management is an integral part of our economy, not an evil to be rooted out. The Minister should be working with the fleet industry to encourage it to take up cleaner LPG vehicles, not hitting it with a new tax.