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4.14 pm
Paddy Tipping (Sherwood) (Lab): I am extremely pleased to follow the Chairman of the Select Committee, the right hon. Member for Fylde (Mr. Jack), and I do not disagree with one word that he said. The strength of
the campaign for biofuels is the strength of support that exists on both sides of this Chamber, in the other place, and among the people outside the Palace of Westminster who work in this indigenous industry. I have looked at this issue fairly closely, and there are very few people who oppose the argument advanced by the right hon. Gentleman.The Government face a serious challenge, which they are indeed taking extremely seriously. They have a good record in moving towards a low carbon economy, and in terms of Kyoto they have been a leader in the field. We will meet our targets, but they will be achieved on the back of reductions in the manufacturing and electricity generating sectors and in the coal industry. If we really are committed to a low carbon economy, the essential task before us is to tackle the transport sector across government.
Despite a fine record in other fields, this Government—and previous Governments—have fought shy of tackling carbon emissions in the transport sector. That is the big challenge that confronts us all. It is a difficult one, and one of the few tools available to us in the short term is the development of biofuels: biodiesel and bioethanol. The problem, which has already been spelled out today, is that myriad Government Departments are involved in this discussion.
The Government helpfully replied to the Select Committee report on 21 January, and the opening page of that response makes interesting reading:
- "In common with other policies and issues which are wide-ranging in their impact on the UK, there are a number of Government Departments with an interest in biofuels."
I say directly to my good friend the Minister, who is keen on this issue, that throughout the world—in France, Germany, Italy, Spain, north America and, particularly, Brazil—biofuels are taking off. By way of comparison, what do we have in the UK? Let me put it crudely: some chip oil recycling. We must do better than that. I am absolutely convinced that if we are to tackle the transport sector, we need to introduce firm policy proposals for biofuels.
The European Union gives us an opportunity to make some progress. A biofuels directive was published on 8 May last year, but it is still not clear—perhaps the Minister can answer this question today—when the long-awaited Department for Transport consultation document on how we are to achieve our targets will be published. The story is that it will be published in late April. There will be a 13-week consultation period, and the Government should respond to the Commission by the summer, setting out a policy on how we are to achieve our targets of 2 per cent. by 2005 and 5.75 per cent. by 2010. Given the very slow start that has been made in introducing that consultation document, it is clear that we will fall at the first hurdle. We must do better than this.
Mr. Heath: Why should this have anything to do with the Department for Transport, given that a motorist
using petrol with a small substitution of ethanol will not know the difference? Surely it is a matter for Departments dealing with the environment and agriculture, and for the Treasury. Waiting for the Department for Transport to come up with its reasons is clearly a superfluous exercise.
Paddy Tipping: That may well be so. What is essential is for all the Departments involved to work together. Next week's Budget statement will give us an opportunity to make some progress, and the energy White Paper and the pre-Budget report published last autumn gave biofuels the amber light, but at present we are not moving off the grid. As the hon. Gentleman says, the Department for Transport has yet to issue its consultation paper.
We need, in fact, to go beyond consultation. We need firm policies to deliver a British biofuels industry, and that could be done in a variety of ways. So far, the focus has been on a 20p duty derogation, although the industry says that another 6p or 8p is necessary. Another approach, which may well be feasible, is to consider capital grant and capital allowance. I have discussed that with the Treasury, and it seems to be a possible option.
The real option, though—the option that a sensible Government ought to choose—has already been mentioned today. I refer to the notion of a road transport fuel obligation. It is clear to me that our entire existing fleet could run with an admixture of 5 per cent., or perhaps 10 per cent., with no engine modification. That alone would bring about amazing carbon reductions, at no cost to the Treasury.
We consumers—we who use the car—know, or ought to know, that we are causing serious environmental damage. It must be right for the consumer to bear part of the cost. A small addition, a growing addition, of biofuels creating a fuel mix must be the answer. I have looked carefully at the Lords amendment that has been mentioned. Its content is reflected in early-day motion 538, signed by a number of Members on both sides of the House. It is supported by people throughout the country, throughout the sector and throughout industry.
I think that there is a danger of sucking in imports from, say, Brazil. Adopting a renewable transport fuel obligation with an escalator attached would give us an opportunity, over a period of years, to move from 1 per cent. to 2 per cent., 5 per cent. and even larger percentages. I am indebted to my hon. Friend the Member for Southampton, Test (Dr. Whitehead), who began to advocate that approach five years ago. At the time it was dismissed with derision, but I think we have moved beyond that now. I think the Government are now committed to a low-carbon economy. They must take up the challenge, and move into the transport sector. I envisage no cost to the Treasury. Consumers—drivers—should carry the cost, and it is a small cost indeed. I hope the Minister will take account of what is said here today, of the voices of those in the other place, and of the emerging consensus across the sector in favour of a fuel obligation.
It cannot be right for us to use biofuels imported from abroad. Throughout my county of Nottinghamshire, farmers can produce the goods. At Newark, British
Sugar has a factory that could be converted to bioethanol production. We can add value to the rural economy. One of the issues facing the Government, on which they are fighting strongly, is that of helping rural economies to emerge from a tough time for farming. By any measure, biofuels bring together a series of policy objectives to meet our need to create that carbon-reduced economy. Let us stop talking about it, and do it.4.25 pm
Norman Baker (Lewes) (LD): First, I congratulate the right hon. Member for Fylde (Mr. Jack) on his introduction to this debate. His argument was most convincing, and unanswerable in its logic. I hope very much that the Minister will agree with the sentiments expressed and the logic deployed.
I also hope that the Minister will notice that three speakers, from three different parties, have—or will have—taken the same line. The difficulty is that while in the Chamber this afternoon we will agree on the way forward, and even the Minister may agree on it, those who are of a different mind for whatever reason, or who are unable to make the connections, are not present. No Ministers from the Treasury, the Department for Transport or the Department of Trade and Industry are present. The Minister may report back to his colleagues that there was unanimity in the debate, but will that be enough to convince the relevant Ministers and Departments that they must take the necessary action?
I hope that I am not being too pessimistic, but over the years I have come to conclude that the Department for Environment, Food and Rural Affairs and its Ministers have put forward some good ideas and thoughts, which then seem to run into the sand somewhere in Whitehall and Westminster. Far too often, DEFRA Ministers defend the logical position, but it is not one that they are able to deliver. At DEFRA questions today, the Secretary of State set out a sensible policy on Nirex, which the DTI tried to stop, a sensible policy on abandoned cars, which the DTI is trying to stop—
Mr. Heath: And on milk prices.
Norman Baker: Indeed. The list of sensible policies put forward by DEFRA to which it secures agreement from all three main parties, but which suddenly disappear—we know not why—is almost endless. We all need an assurance from the Minister as to what process will take forward in Government what I think will be the view of all three parties represented in the Chamber today. How will we learn the responses from the various Departments involved to the comments that will have been made today?
In particular, I am concerned that we will in no way meet the EU targets—not the 5.75 per cent. one, and, if we are not very careful, not even the 2 per cent. one, which, as the Minister is muttering from a sedentary position, is due shortly. I am not clear as to whether we will meet that, and it would be helpful if the Minister set out the steps that he intends to take to meet that target.
The Minister has had number of useful suggestions from Members who have spoken so far. I am particularly attracted, as, I think, is the hon. Member
for Sherwood (Paddy Tipping), to the idea of a road transport renewable fuel obligation. He was much too modest to say that he tabled the early-day motion on that, so I put that on the record now. He is right that it has attracted all-party support, however, and that it has a large number of signatures in support. That proposal seems to me the way forward and the way to achieve the objectives. There are difficulties with the alternatives—that of capital grants has merit, and it may support the domestic industry better than any other alternative, but clearly there is a cost to that. There is also the differential, but again, I am not quite sure what its impact would be, and it would cost money, so it is less attractive to the Treasury. The fuel obligation is a simple proposal that delivers the goods, and I hope very much that that will be taken forward.Genuine concern exists, and not just in the House, about the likely failure to meet that target. Members will have received a letter from the National Farmers Union in advance of this debate.
- "As things stand, there is every likelihood that this target—
- "will be completely missed, due to the Government's policy on biofuels."
There are two reasons for making progress on biofuels to a greater extent than in the past. The first is the environmental argument. I was going to refer to the Government's response, but I should say: the response of the Department for Environment, Food and Rural Affairs, which is what we are debating today, and I wonder how much influence the Treasury and other Departments had on it. DEFRA's response, on behalf of the Government, to recommendation 9 is that
- "capturing the environmental benefits of biofuels is the principal policy reason for Government support with duty initiatives. Other considerations such as economic and social factors, though secondary, are also taken into account in the Chancellor's fiscal decisions."
In the road transport sector, we are clearly in some difficulty. Industry has done quite well at cutting its carbon emissions, but the same is not true of road transport, where emissions are rising rapidly and, frankly, the Department for Transport has no plan to deal with them. The 10-year plan, which talked about road traffic reduction—we should remember that that was a Government commitment—has all gone, and we are now seeing big increases in road transport throughout the country. The last figure I saw was about 7 or 8 per cent., and in a parliamentary answer of a couple of weeks ago, the Department for Transport projection was for a 25 per cent. increase in road traffic by 2010. That is in free fall; there is no handle on that from the Department at all. If it cannot control the number of vehicles, then my goodness, it must control the emissions from all the vehicles on the road, if there is any chance of reducing—or even levelling out—the carbon emissions.
If I went on for long about aviation, you would rule me out of order, Mr. Deputy Speaker, but I want to say that our previous debate was a disgrace in respect of the Government's commitment to dealing with carbon emissions from aviation. It is another matter that must be taken into account.
I pay tribute to the Environment, Food and Rural Affairs Committee for its extremely well argued and sound report, which demonstrated that considerable CO2 emission savings could be achieved through bioethanol. The representations from British Sugar—I imagine that many Members will have received them for today's debate—referred to a possible 70 per cent. saving of such emissions, so there is a great deal to play for. These are big games; I only wish that we move forward and accomplish them.
The Under-Secretary of State for Environment, Food and Rural Affairs probably articulated the Department's position when, in a debate of 15 October 2003, he said:
- "Biofuels can provide significant life-cycle reductions in carbon dioxide emissions".—[Official Report, Westminster Hall, 15 October 2003; Vol. 411, c. 89WH.]
I have talked about the environment, but there are also benefits for agricultural and rural communities. The right hon. Member for Fylde said that there would be a marginal increase for road users—frankly, it would not be much, but even a marginal increase would have to be offset by the gains to the rural economy from the creation of many jobs. It is not clear precisely how many jobs might be created, but in a previous debate of 20 November 2003, the Minister for the Environment estimated that 6,000 jobs would follow from meeting the 5.75 per cent. target. That is not insignificant for rural communities. The European Commission report of 2001 said that a UK biofuels industry could create 20,000 to 30,000 new jobs, and my hon. Friend the Member for North Norfolk (Norman Lamb) has been particularly active on that issue. There is some uncertainty about the exact scale of the jobs that will be created, but no one is in any doubt that they will be—and often in areas of deprivation or of hidden rural unemployment. We should not lose sight of those benefits.
We are always encouraging farmers to diversify, and biofuels represent a classic way for them to do that. Biofuels are good for the environment, and diversifying into them would help protect rural industries and the rural economy. We should encourage that.
The Minister will be familiar with the Curry report, from both his present and his previous roles. That report states:
- "England needs a long-term strategy for creating and exploiting opportunities in non-food crops, including starch and oils".
No one so far has referred to the Environment, Food and Rural Affairs Committee report. The summary states:
- "The Government's biofuels policy, to the extent that it has one, appears muddled and unfocused."
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