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Mr. Francois: I thank the hon. Gentleman for his courtesy in giving way. He mentioned one Select Committee report. He may be aware that the Environmental Audit Committee, on which I serve, has produced a number of reports on the environmental effects of aviation. Given the effect of so-called "radiative forcing", aircraft emissions can have four times the effect on the ozone layer when they are made at altitude—when aircraft are in flight—than they have when those chemicals are released into the atmosphere at ground level. That very important environmental point is not lost on people who live in north Essex.

John Thurso: I am grateful to the hon. Gentleman, who makes a valid point. It is extremely valid when one considers that projections suggest that aviation emissions will constitute 50 per cent. of emissions in this country by about 2020.

The objective of our transport policy, therefore, must be to reconcile the need for an efficient and effective transport system with the imperative of reducing emissions. Such an objective can be achieved only if the Government, providers and consumers change their attitudes considerably, but the Government must set out the vision—the long-term plan—and provide the leadership. Currently, plans are laid on a 10-year basis. I suggest that 10 years is far too short. It is obvious that we need to deal in a much longer time scale for all modes of transport—something like 25 to 30 years. Indeed, the Secretary of State has recognised that, and I pay tribute
 
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to the Government for the aviation White Paper, which takes a much more long-term view. I may not agree with all its conclusions, but I absolutely agree that considering modes of transport in the long term is vital if we are to have sustainable policies and a clear vision that the public can sign up to. The same is needed for the railways.

Chris Grayling: Will the hon. Gentleman clarify whether imposing an additional environmental duty on aviation fuel is Liberal Democrat policy?

John Thurso: Our current policy is to seek to ensure that the external costs of aviation are properly reflected. There have been suggestions that that should be done by means of an aviation fuel tax, which I believe has considerable merit. The problem is that aviation fuel tax would be extremely difficult to put it in place without treaties at the very least in Europe, if not throughout the world. So I rather prefer—this is what I am arguing for within my party, and I hope that it may become our policy—a tax based on the aircraft that take off from this country, rather than air passenger duty, which has absolutely no green benefit whatever and was introduced by a Conservative Government simply to balance the books. I would get rid of air passenger duty and tax aeroplanes instead. That would not only encourage the aviation industry to start to produce more fuel-efficient aeroplanes and airlines to ensure that they operate more effectively, but direct the taxation at the bad. It would be a much better way to externalise the taxation. I sincerely hope that, when that policy has been adopted through our party channels, I shall be able to present it.

Chris Grayling: I am grateful to the hon. Gentleman for diverting for a moment to clarify that interesting point. He is talking about scrapping air passenger duty and replacing it with a levy on planes. Presumably, the airlines would pass on the cost to passengers. How would that change anything?

John Thurso: The hon. Gentleman misses an obvious point: air passenger duty is levied on each passenger, so it is easy to put on each ticket whatever the cost is. A duty levied on the aeroplane could not be passed on to passengers by adding it to the ticket price for the simple reason that the airline never knows how many people will fly on it. If the aeroplane itself were taxed, the amount would have to be included in the airline industry's costs. It would be passed on in the total cost of the tickets for all passengers, which is precisely what we seek to achieve, so the true costs would be externalised. The airlines would not be able to show £9 to fly somewhere in Europe and then add on tax and all the other bits in brackets.

Sir Brian Mawhinney (North-West Cambridgeshire) (Con): May I tell the hon. Gentleman that I very much hope that that becomes Liberal Democrat policy?

John Thurso: I am confident that it will.

We must also consider managing demand, and we have already started to talk about doing so. It is important that we consider the true cost of each mode of
 
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travel as well as managing demand, which is a vital tool in resolving the paradox. We can no longer accept that everyone has a free and unfettered right to travel wherever they wish, whenever they wish, by whatever mode of travel they wish. Transport is a limited resource, so it must be managed wisely. It is for the Government to influence how people and goods are transported by the policies that favour those modes with the least environmental cost. Our citizens have a right to efficient transport, but not by every mode, everywhere. Our resources must be managed. Against that background and given the resources available, it is clear that we have not begun to maximise our potential.

Take freight, for example, which is vital to commerce and industry. More than 90 per cent. of freight arrives at and departs from our shores by sea, but it is largely transported by road thereafter. Yet, all along our coasts, many medium and small ports are underused. Surely, transporting some of our freight onwards by coastal shipping would be an important addition to our armoury. After all, sea travel is one of the most environmentally friendly ways to move freight. The infrastructure exists, so why do the Government do nothing to promote that form of transport?

The railways offer a considerable opportunity for further freight movement, but freight trains need access to the rail network to maximise it. We also need to promote the concept of freight villages and the related logistics. That, too, will require Government support. Getting our railways right is the keystone for transport in the future. The industry needs sound structures for the future, and the outcome of the current rail review must settle the questions about the current arrangements.

The objective of rail policy should be, first, to provide a safe, reliable and affordable system of public transport and, secondly, to invest in the network's future to provide a modern and efficient railway for the 21st century. If we are to have a successful rail network, three functions need to be undertaken in considering the structure, which is the objective of the rail review: first, strategic direction; secondly, service delivery; and, thirdly, regulation.

On strategic direction, the Department for Transport should provide a long-term, strategic vision for our railways. The Government, in partnership with the private sector, provide much of the funding, and it is their responsibility to ensure that an inefficient transport infrastructure exists to support the economy. The Government must therefore provide the leadership and vision, which, as I have said, should be over 25 to 30 years, in the Department for Transport. That would effectively remove the need for the Strategic Rail Authority.

The management of service delivery should remain with Network Rail for the infrastructure and with the train operating companies for the franchises. The Department for Transport should be responsible both for funding arrangements and for defining the strategy for Network Rail, working in a new, simplified regulatory framework. Network Rail is best placed to be responsible for the day-to-day management and running of the network, together with the day-to-day co-ordination of services. I saw a leak in the weekend press that suggested that Ministers would be responsible
 
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for some of the day-to-day management of the railways. I sincerely hope that we never arrive at that unhappy state of affairs.

On regulation, it is essential that there is an independent regulator. The current arrangements are clearly over-bureaucratic and complicated, particularly with regard to safety. The regulation model best suited to the railways must follow that of the Civil Aviation Authority for air transport, whereby economic, environmental and safety regulation come under one body. The new regulator would include the new rail accident investigation branch as well as consumer representation. That would mean removing all safety functions from the Health and Safety Executive and giving them to the new body, which should also take responsibility for organising the franchising process. It might also be worth looking at the duties of the Office of Fair Trading relating to the railways and considering whether they might more suitably be placed under the auspices of the new regulator.

There is, however, one leftover from the awful privatisation that is a complete waste of time, wholly unnecessary and adds un-needed cost. I refer to the monopolistic rolling stock companies, which add very little. If anyone wants proof that they are simply a cash cow, the fact that they are all owned by banks does it for me.

If franchises were longer, it would be possible to envisage a system whereby the train operating companies could become owners of rolling stock and therefore be able to have control over their assets and costs in much the same way as happens in other areas, such as lifeline ferry links, where expensive assets are passed on from one franchisee to another, having been amortised for their life over the balance sheet of the first company. Examining the rolling stock companies is a critical part of taking forward the reduction of costs on our railways.

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