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The Financial Secretary to the Treasury (Mr. Paul Boateng) indicated dissent.

Mr. Gummer: The Minister may shake his head, but it is a matter of fact. The measure was proposed by the Treasury and comments were canvassed from the Department responsible for the environment. It is not surprising that the Treasury announced how much it would raise before anyone knew how many tonnes of carbon it would cut. Nor is it surprising that the changes that took place were intended not to improve the environmental outcome, but to buy the odd vote or two from people who thought that they were being over-pressed by the climate change levy. We have ended up with a huge operation that will do little good and was aimed largely at trying to do something on the margin for coal producers.

The truth is that the climate change levy will not contribute anything like enough to reducing emissions, but it will make us less competitive in many markets. That cannot be a good thing. I suggest to the Minister that it is unfair to put people like me in the position of having to be antagonistic towards a levy that I would instinctively support. It is called the climate change levy, so the Government should ensure that it is an environmental tax, not twist the words and make it difficult for us to support it.

Similarly, the aggregates tax will not deliver even as much as the industry offered in advance of it. I shall not say too much about that, as I do quite a bit of work with the industry. The Government have not proved the case for the tax. They have not explained how they will ensure that it is not translated into longer journeys by lorries carrying reconstituted material. They have not explained why so little of it will be used directly in the sustainability fund, nor what the sustainability fund will do. They did not even explain, before the tax was introduced, what it would do and how it would do it. That is not good for the environment because it does not look competent. Environmentalists must look competent because we are always being accused of not being so. The Government should at least have ensured that the tax was introduced comprehensibly and comprehensively.

HFCs and combined heat and power are very different things but they both suffer from the same problem—namely, that the Government have not made it easier for people to move from dangerous ozone-depleting refrigerants to forms of refrigeration and air conditioning that do not lead to global warming. We should be able to move from CFCs to benign alternatives. I try to encourage

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people to do that, for the good reason that I believe that it is right, and so should the Government. On CHP, the Government were warned for months about what their legislation and regulations were doing to the industry, yet they did nothing.

How can we achieve our ends? We can do so by using the market to which the hon. Member for Nottingham, South (Mr. Simpson) rather cack-handedly referred. That market is a powerful mechanism; all we need to do is to give it the fourth dimension of time. If we make it recognise what it does over time and put a price on that we will be able to make it a powerful driver of environmental change. We can do that because we are part of the European Union. If we were in a market on our own we would not be powerful enough to make those changes: the competitive position would make it impossible. But because we are part of the largest trading community in the world, we have the means not only to change market conditions for this nation and for our colleagues in the EU, but to affect the global scene by driving those changes in the United States and beyond. In environmental terms, the EU gives us a large enough base not only to change ourselves without competitive disadvantage, but to change the world through others having to come to terms with the EU's environmental demands.

Not for the first time, I remind the House of the centrality of the European Union in ensuring that we have sensible environmental policies. The Chancellor can act effectively on taxation and regulation only if we are properly linked to the common decisions of the EU, which alone makes it possible for us to reclaim sovereignty over our environment. That is why the European Union is so crucial and why, without it, we lose sovereignty.

3.39 pm

Mr. Colin Challen (Morley and Rothwell): I want to focus on an issue that is affecting my constituency particularly badly, and which I imagine many urban hinterland seats face: the development of greenfield sites for housing. The pre-Budget report states on page 118:

That is absolutely right. I do not know the relative size of Exmoor compared with my constituency, but I know that there is a feeling in Morley and Rothwell that the quality of life is beginning to suffer rather badly, due to the amount of new house building going on.

The pre-Budget report contains some excellent moves against new housing on greenfield sites to re-balance the demand for regeneration, but there is, as the Environmental Audit Committee says at paragraph 31 of its report, a great concern

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The Committee, on which I sit, goes on to call for urgent research

Urgent is indeed the word.

There is a massive demand for building land, as evidenced by a report from the Joseph Rowntree Foundation, cited in Monday's Yorkshire Post, which claimed that new build must rise by 60 per cent. and stay at that level for the next 14 years. All that house builders want to do is get their hands on as much greenfield land as they possibly can, and cover it with bricks and mortar. Also in Monday's Yorkshire Post, the chief executive of Persimmon Homes, Britain's biggest house building company, said that all the house builders want to do is buy land, build houses and sell them at a profit. I understand that; there is a demand and those companies make the product to fulfil that demand, but they do not get too worked up about greenfield sites. In fact, they even advertise for greenfield sites, with or without planning permission.

The Treasury's response to the Environmental Audit Committee's question about the perverse VAT incentive was rather bland, and certainly lacked any sense of urgency. That is a great shame because, as more houses go up, a curtain of finality drops on our countryside, which is now at its weakest point of resistance to these estates of identikit houses on the edges of our cities and towns. Everywhere we look, regiments of bland dwellings are crowding along the boundaries of the urban landscape, like some great invading encirclement in a mediaeval siege, seeking to ensure that whatever is left of the unique heritage of our towns and cities is made to conform to the uniform master plan of the chief executive of Persimmon Homes.

Incentives need to focus much more on how we can reclaim city centres, brownfield sites and old industrial buildings. We are told that, nationally, 760,000 houses are empty on a long-term basis. In Morley, there is a rich architectural heritage, dating from the town's great industrial days, which needs an injection of capital to restore it to modern use. Old buildings need nourishing, and as there is clearly a need for residential buildings, the measures covered in the pre-Budget report for revitalising such buildings need far greater emphasis. As long as it is so much cheaper to build on a nice greenfield site, however, the incentive is not there, and what is achieved in the older urban areas is still far too weak in many of them to achieve a pure market-driven momentum. That is the case in Morley, and I ask the Treasury to give special attention to the recommendation on removing the perverse incentive contained in the Environmental Audit Committee's report.

3.44 pm

Mr. Mark Francois (Rayleigh): I am pleased to be able to contribute to this debate as a member of the Environmental Audit Select Committee, whose report forms the basis for this afternoon's discourse. On a personal level, I am also pleased to be doing so with the Financial Secretary to the Treasury, the right hon. Member for Brent, South (Mr. Boateng), in the Chamber. I fought my first parliamentary seat in Brent, East against Ken Livingstone in 1997, and I have fond memories of participating in a number of borough-wide debates during

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that general election, including some with the right hon. Gentleman, so it is a pleasure to be here, debating with him again, five years on.

I would like to concentrate on the role of the Treasury as highlighted in the Committee's report. The Treasury is the Department primarily responsible for taxation policy, including environmental taxation. As such, it bears an important responsibility for the practical effect of such taxation on promoting—or otherwise—the concept of sustainable development. As part of our inquiry, we took evidence from the Financial Secretary to the Treasury, as well as from a number of other interested organisations, including the Confederation of British Industry, the Green Alliance, the Institute for Public Policy Research and Friends of the Earth.

Despite the Government's statement of intent on environmental taxation that accompanied the 1997 Budget, our witnesses expressed some scepticism about the Government's continuing commitment to using environmental taxation as an instrument of environmental policy rather than as a cover for raising additional taxation revenue, for the primary benefit of the Exchequer rather than for specific objectives of promoting sustainable development.

The Committee reported in paragraph 12 of its conclusions and recommendations:

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