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Mr. Redwood: Ah, the biggest clobberer wishes to intervene!
Julia Goldsworthy: Would the right hon. Gentleman like to give some examples of how the Conservatives would achieve their plans to cut carbon emissions by one third?
Mr. Redwood:
I am about to tell the House why I favour friendly greenery, but the hon. Lady seems to imply that she agrees with unfriendly greenery. We will all note that in the context of the forthcoming local elections.
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The best friendly green policy that this country has seen was introduced by a previous Conservative Government, who offered a tax discount for people buying unleaded petrol at a time when there was far too much lead in the atmosphere as a result of the use of leaded petrol. The measure was universally popular: everyone wanted to buy the cheaper petrol, and that gave them a good feeling, because it was cheaper and because they were helping to clean up the atmosphere and not doing so much harm to the lungs of children who lived near main roads. That was an extremely good green policy.
I would suggest that we do rather more of that kind of thing. Why do we not have more incentives for people who wish to insulate their homes, put in a condenser boiler or buy a fuel-efficient car? The disappointing thing about the Budget is that although it starts to go in the right direction by introducing tax breaks for fuel-efficient cars, it has chosen a range for those tax incentives consisting of cars that cannot be bought in this country at the moment. That seems a bit of a pity—
Mr. Redwood: Well, it implies that the Government are relying on the stick rather than the carrot. I would ask the Government to amend the figures in Committee so that this policy can actually work. Why not allow people a tax break if they buy cars that are available in Britain at the moment, if they are fuel-efficient and friendlier on the old carbon?
It is a pity that when the Government get to inheritance tax in their blockbuster Bill, they do not do more to raise the threshold. I thought that, by cross-party agreement, inheritance tax was designed to deal with the super-rich leaving huge sums of money to their children or others, but it is now levied on most people in the south of England, and quite a few in the north, who are passing on their homes to their children. That was not the original intention, and the Government should recognise just how much house prices have risen by increasing the threshold, so that this is no longer a tax on those passing the family home on to other members of their family.
I hope that the Government will think again about some of the measures affecting trusts. The point was well made by my hon. Friend the Member for Chipping Barnet (Mrs. Villiers) when she said that many trusts were set up not in order to get round tax legislation in a legal way, but for perfectly good reasons relating to family circumstances such as divorce. It seems a great pity that such arrangements will now be caught by the legislation and will have to be re-examined at considerable expense, and perhaps reorganised—so I hope that the Government will think again.
If the Government want an enterprise economy, they would be wise to revise their ideas on the abolition of the zero per cent. rate of corporation tax. That was the only corporation tax rate that I ever liked or approved of, and it was a great pleasure when this Government introduced it. They ought now to try to find ways of bringing the other rates down closer to it, rather than abolishing the one good attractive rate that we have. Such measures will work, although they might take a little time. Offering a zero rate to people setting up new
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and small businesses is an extremely good idea. They need the money that their businesses generate for all the bills that they have to pay, and it is good for them to have that extra incentive. The Government would also be wise to reduce the incidence of capital gains tax, which can send out the wrong signals in an enterprise economy.
We live in a highly competitive world, as hon. Members on both sides of the House noted in the Budget debate, and again today. The Government need to realise that the point that we reached a few years ago, when we had relatively low tax rates, has now been overtaken by events in eastern Europe, Ireland and many parts of Asia. Tax rates are being driven down by the competitive process of the world economy, and if we do not match the better rates we will see more investment going abroad and more people closing their factories here and setting them up elsewhere. There is growing evidence that we do not have to be a low-wage society to do well in this world. The United States of America and Ireland are very successful economies, but they are clearly not low-wage societies. However, we do need to be a low-tax society to do well.
I urge the Government to live up to their rhetoric. They need to deregulate more, legislate far less, get rid of the great chunks of the Bill that are incomprehensible and not needed, and introduce lower tax rates for the enterprise sector. Then we might not need to worry quite so much about the productivity crisis in the public sector, because we would be generating more industrial and commercial activity elsewhere. I would also urge the Government to treat the productivity problem in the public sector very seriously indeed. It is already causing considerable political anguish in the run-up to the local elections, with the unfortunate stories about the sacking of nurses and doctors. These problems could be avoided if the Government were to get a grip on the cost of the bureaucracy.
6.6 pm
Rob Marris (Wolverhampton, South-West) (Lab): I should declare that, as well as being a member of the Transport and General Workers Union and the Law Society, I joined Greenpeace in 1975 and I am also a member of Friends of the Earth. I declare that interest because, as we can see from the Opposition amendment before us and from the Budget, environmental issues are very much de nos jours.
We should be more sophisticated in the way in which we talk about the environment. I seem to remember that the Green party got 15 per cent. of the vote in the 1994 European elections, but enthusiasm for green issues then seemed to ebb. These things go up and down.
As you might know, Madam Deputy Speaker, Birmingham airport now provides direct flights from the west midlands to Poland. I have been mulling over these issues for some time, and I took what turned out to be the inaugural flight on SkyEurope. It was very good going out, but a bit delayed coming back. However, I would recommend it as a way of visiting Poland. I got to Birmingham airport at 7 am on Wednesday just before Easter, and the place was packed. I started to reflect on what people actually do, in contradistinction to what
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they say. I suspect that this applies to most hon. Members, although there will be some exceptions. Most hon. Members to whom I talk socially take many flights—often cheap flights—during the year, and I suspect that most of them drive cars. Most probably, they drive thousands of miles a year, as I do myself. I drove about 4,000 miles last year. We need to be careful, given the measures that we propose, that we are not seen as hypocrites. We must not appear to be behaving like King Canute on these issues.
Global warming has been much talked about in this debate, and so it should be. I referred to it in two interventions on my right hon. Friend the Chief Secretary to the Treasury. Global warming is here to stay, and it is going to get worse. The United Kingdom emits roughly 2 per cent. of all greenhouse gases. If we halved that tomorrow, it would make hardly a dent in the problem. I stress that that is not to say that we should back off from the admirable efforts that the Government have made, in this Budget and previously, to cut the United Kingdom's contribution to greenhouse gas emissions. However, if the world's emissions went down by 1 per cent.—which would be the result of halving our 2 per cent. contribution—it would make almost no difference whatever to the effect within the United Kingdom.
I detect among many hon. Members—I include myself in this—and among people in our society some hypocrisy about what they do in their personal lives about carbon emissions and a tendency to behave like ostriches in relation to climate change. Most of what we hear about climate change relates to cutting the emissions of one relatively small emitter, which is important but would not stop the projected 1 m rise in sea levels by 2100, which is an awful lot for an island. By 2050, under global warming, average temperatures are projected to rise by 3.5°C. It is suggested that, if no steps are taken to halt climate change globally, the world could warm up by an average of 13°C over the next 1,000 years. That would give London the climate that Cairo currently has, although London would no longer exist as it would be under water.
Mr. Ellwood: The hon. Gentleman must understand that, unless Britain sets an example, as it has done in many other areas, it is unlikely that countries such as China, Brazil, India and will follow suit. We must show what can be done and then export those ideas.
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