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Malcolm Bruce (Gordon) (LD): I am grateful to my colleagues for tabling this group of amendments and enabling us to have this debate, because it demonstrates that, at least on the Liberal Democrat Benches, there is a recognition that environmental taxes have a social
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consequence and need to be refined. They cannot be applied as a blunt instrument. The speech made by the hon. Member for Wycombe (Mr. Goodman) on behalf of the Conservative Front Bench confirms to anyone who listened to it why the Conservative party is almost non-existent in Scotland. It has no understanding of what sparsity and remoteness are about, other than in terms of its own support.

My hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso), who represents a constituency that has all those characteristics and has a real understanding of the matter, has given a pretty coherent account of why the needs of people in such areas should be addressed by the House in the way that the amendments try to do.

In a brief intervention I simply want to make the point that car ownership in rural areas, and certainly remote and sparsely populated rural areas, is not a luxury but a necessity, and the costs imposed are a real burden. There are factors that need to be taken on board. For example, the Scottish Executive have been reviewing their definition of poverty because on a previous definition car ownership meant that one could not be poor. In reality, poor people in rural areas simply cannot function without owning a car, yet under a previous definition people owning a car were not allowed to call themselves poor. That is the sort of absurdity that one gets into when the definitions do not take into account the reality on the ground. The amendments seek to do that.

My hon. Friend the Member for Eastleigh (Chris Huhne) has demonstrated clearly that this is a coherent and balanced part of an overall policy, and one that the Conservative party would be well advised to take a little more seriously and not try to predetermine when, frankly, its own policy has no intellectual coherence whatever. In particular, it showed no interest in the problems of poor people living in rural areas, only a desire to have a go at the Liberal Democrats for really trying to address the issue. I just note in passing that the Scottish Nationalists sent the hon. Member for Dundee, East (Stewart Hosie) to make the argument, not one who represented a rural or sparsely populated area who might have had some greater understanding of the problems being addressed.

Stewart Hosie: I thank the hon. Gentleman for giving way, not least because I am the party's Treasury spokesman and this is my brief. Two thirds of the landmass of my constituency is in Angus, and one ward is fully rural. I have a perfect understanding of the issues that the hon. Gentleman is discussing.

Malcolm Bruce: We shall see, but I do not think that the hon. Gentleman's contribution demonstrated that understanding. He was implying—this was what slightly nonplussed me—that he thought it unfortunate that our amendments would have qualified a greater proportion of the population of Scotland to receive the benefit. I should have thought that a Scottish MP would welcome the fact that amendments were being tabled that had particular relevance to rural areas of Scotland and from which a greater proportion of Scottish households and individuals would benefit. My hon. Friend has
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confirmed that applying the English Countryside Agency's definition to Scotland would inevitably reach a greater percentage, for the simple reason that we are defining remoteness and sparsity and the problems that go with them.

I have just been dealing with a matter relating to fuel poverty in Scotland. Central heating fuel bills in Scotland can be 68 per cent. higher than in the south of England, and the same applies to transport costs for many people living in the north-east, the north of Scotland, the borders and the rural areas of Scotland. Through necessity, transport costs are much higher. Another problem is that, given that people on low incomes have to struggle to pay high excise duties and higher fuel charges, one thing that often goes by the board is regular vehicle maintenance, which has detrimental effects on the environment.

I commend the amendments, which address a real issue and show the understanding of a party that supports the case for developing green taxes, that in order to ensure that those taxes do not fall disproportionately on people in disadvantaged areas we must introduce refinements. That is what the amendments seek to do and I commend them to the House.

John Healey: The debate has been entertaining, Sir Michael, particularly for Government Members. It has also been comprehensive and, if I may so, entirely between the Opposition parties. That is also entertaining, given that these are the parties that are supposed to have reached some consensus on climate change. That comprehensive debate leaves me, in all honesty, with very little else to say.

The amendments proposed by the hon. Member for Falmouth and Camborne (Julia Goldsworthy) call for the introduction of regional rates of excise duty so that those with a postcode in rural areas can pay less than urban areas. I have both principled and practical objections to those proposals. UK vehicle excise duty rates are set at the current level for good reasons. First, they raise revenue to fund essential services and, secondly, they help to achieve environmental objectives, which apply equally to rural areas as to the rest of the UK.

Chris Huhne: Will the Minister give way?

John Healey: No, I will not; I am responding to the amendments proposed from the Liberal Front Bench by the hon. Member for Falmouth and Camborne. That is what I am responding to—despite the hon. Gentleman's own speech.

In addition to the technical and practical deficiencies of the amendments, introducing a separate rate of vehicle excise duty for rural areas would also present significant administrative difficulties as well as compliance problems. Motorists could easily register vehicles in designated sparsely populated rural areas and then use them exclusively or predominantly in urban areas. Other hon. Members have already mentioned the technical and practical difficulties, to which I am now adding administrative and compliance difficulties.

Julia Goldsworthy: I noticed that the Minister referred to the environmental objectives of vehicle excise
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duty. Will he provide further detail on the impact on behaviour of the structure that he has proposed? Will he also recognise the burden on people living in remote rural areas and the fact that they are reliant on cars because they do not have any realistic alternative? I hope that he will take seriously the points that Liberal Democrat Members have passionately made.

John Healey: I am disappointed in the hon. Lady. I did not accept the intervention of the hon. Member for Eastleigh (Chris Huhne), who gave his question to the hon. Lady to put to me. The question she poses, however, is a question for the clause stand part debate, not our debate on vehicle excise duty amendments. I do not accept that the Liberal Democrat amendments are desirable or workable. I do not accept that a principled case has been made for them. I believe that they would prove administratively complex and open to abuse. If pressed to the vote, I urge my hon. Friends to reject them.

Amendment negatived.

Question proposed, That the clause stand part of the Bill.

John Healey: We had a wide-ranging debate on a narrow set of amendments, but I should make some remarks in the clause stand part debate. In general terms, I welcome the fact that climate change is increasingly recognised as one of the most serious global challenges that we face. In the UK, we produce just 2 per cent. of global greenhouse gas emissions, but we must build on the progress that we have made on our Kyoto obligations. We are and remain one of the few countries on track to meet our obligation. We must also build on our ambitious domestic goals to cut carbon and move to a low-carbon economy. It is right to do more and it was right for the Chancellor to have done more in his Budget announcements.

Transport is one of the key sectors in which we need to build on existing reforms. It is the second largest source of carbon dioxide emissions in the UK and a source of significant air pollution. The vehicle excise duty system has been radically restructured, and it is now based on carbon emissions. Under this Labour Government, the UK has taken the lead in introducing a structure for vehicle taxation that differentiates according to CO 2 emissions, just as we did with the climate change levy and the first economy-wide emissions trading scheme. The European Commission has recommended that graduated VED should form the blueprint for vehicle taxation across the EU. The graduated VED system is designed to provide a signal to consumers at the point of purchase to bear in mind the environmental impact of the models that they are considering.

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