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At their spring conference, the Liberal Democrats voted in a brand new policy for Royal Mail and the post office network. They would separate Royal Mail from the post office network in order to privatise it. They say that they would use the proceeds of the privatisation to fund a string of additional programmes. That is the classic Liberal Democrat policy of assuming they can fund ongoing spending commitments from a one-off receipt. That is fairyland economics from the Liberal Democrats, and I think that they know that. They appear to have made no credible attempt to work out how much their programme would cost, and they are making an open-ended commitment to maintain, or even increase,
the size of the network, irrespective of the changing world in which we live. The problems that we are trying to solve now would return in the years aheadand not too far ahead either.
It is frequently stated that the network plays an important social role, and we agree. But rapid improvements in technology and wider changes in society have had a heavy impact on the many services traditionally seen as being the preserve of the Post Office. We have to accept that the Post Office operates in a commercial marketplace. The service that the network provides, including lottery tickets, foreign currency, telephony, bill payments and financial services, are all in direct competition with other retailers and providers. We have a strong management team in place at the Post Office and we have tasked it with turning the business around. The company is continuing to develop and introduce new services and business activities.
Members from all parts of the House have made clear their concerns for the future of the network. We recognise the calls for urgent decisions, and we are aware that there has been a prolonged period of uncertainty about the future direction of Government policy in respect of the network. I can assure Members that a funding support package of £150 million a year is in place to maintain the network until 2008, and we are carefully considering the options for the network beyond 2008.
There has been substantial activity behind the scenes in obtaining and assessing data on the network, and on how that feeds into possible options for future shape and size. We are not yet in a position where we can say that we have the answers, but I can tell Members that they should rest assured that we are listening and that their concerns will be reflected in our decisions.
The Government have an unprecedented track record of investing in the post office network and supporting Royal Mail, so we are not about to turn our back on them. Let me quote my Secretary of State, from a Financial Times article today. He said that we
are determined to give the Post Office certainty
That this House acknowledges the important role that post offices play in local communities, particularly in rural and deprived urban areas; recognises that the business environment in which Royal Mail and the Post Office network are operating is undergoing radical change with more and more people choosing new electronic ways to communicate, pay bills and access government services; applauds the Governments record of working closely with Royal Mail, Post Office Ltd and sub-postmasters to help them meet these challenges with an unprecedented investment of more than £2 billion made by the Government in supporting the network; acknowledges the important role post offices can play in tackling financial exclusion while recognising that the Government must also take due account of the need to deliver services efficiently; and acknowledges that the Government is committed to bringing forward proposals to help put Royal Mail and the Post Office network onto a sustainable footing.
That this House notes with alarm the rise in carbon emissions since the Government took office in 1997; believes that this record is in part due to the steady fall in taxation derived from green taxes from 3.6 per cent. of gross domestic product in 1999 down to 2.9 per cent. last year; notes opinion poll support for a green tax switch from people onto pollution; urges the Government to move from rhetorical assent on the need for action on climate change to serious policy proposals which will set annual targets to cut carbon emissions, allowing for natural variations from year to year, and establish an independent monitoring body to report on progress; and therefore calls on the Government to increase green taxes on new high-emission cars and on aviation while using revenue generated to cut direct taxes, particularly on low earners, so that there is no overall rise in the burden of taxation.
The motion is about green tax and a green tax switch, a fundamental principle of which is that we should as a society be taxing pollution rather than people and we should be taxing bad things rather than work, risk and effort. On that basis, if we were to engineer a change in the structure of taxation towards green taxation by raising, as the Liberal Democrats have proposed, £8 billion a year extra in green taxes, we would be able substantially to reduce taxation on incomes, in particular by lifting 2 million people out of income tax altogether; abolishing the 10p first rate of income tax; cutting tuppence from the basic rate of income tax; and, by raising the threshold at which the higher rate applies from £38,000 to £50,000, taking out of the higher rate of taxation more than 1 million people, which is broadly the number who have been brought into the higher rate during the period of Labour Government.
Mr. Peter Lilley (Hitchin and Harpenden) (Con): Before the hon. Gentleman goes any further, will he confirm that the switch will work only if the green taxes that he proposes fail to work and therefore fail to reduce the tax base on which they are levied?
Chris Huhne: No, I do not concede that. As the right hon. Gentleman, whose knowledge of economics is extensive, knows well, an ongoing price change is needed to engineer an ongoing change in behaviour. I shall return to that theme later in my speech, and if he wishes to intervene at that point, I shall be happy to give way to him.
The overwhelming reason to implement green taxes is the extreme urgency of tackling climate change and global warming. Nine of the hottest 10 years on record have occurred since 1990. In Britain alone, this summer was the hottest since records began in 1659; in 2002, we suffered two floods that were supposed to occur only every 30 years; we have had the wettest six months since records began in the 18th century; and the incidence of storm surges, flood damage and droughts is increasing.
Globally, the evidence is also compelling. In the past 10 years alone we have suffered the most powerful el Niño effect ever recorded in 1997-98; the most devastating hurricane in 200 years in Hurricane Mitch in 1998; the hottest European summer on record, in which 26,000 more people than usual died in June and July 2003; the first south Atlantic hurricane ever in 2002; the collapse of the Larsen B ice shelf in Antarctica in 2002; and Hurricanes Rita and Katrina in the gulf of Mexico and the destruction of New Orleans.
The science has become more alarming, not less so. It is based on ever more diverse evidence: on land temperature measured by thermometers; on temperature measured by balloons and satellites; on ice cover and ice thickness; on melting permafrost; on sea temperature and sea flow; on the height of waves; and on the incidence of storms, cyclones and typhoons.
At the level of rhetoric and targets, there is now a clear consensus among those on the Front Benches of the three main parties in this House, but there is not a consensus on the level of action or of delivery. We see the reality when we look at the Governments record on climate change: our carbon emissions have increased by more than 3 per cent. since 1997, and we are meeting the Kyoto targets to which we have signed up only by accident, because of the reduction of emissions from the electricity generating sector thanks to the switch from coal to gas. We need to do much more if we are to sustain our efforts and establish a position from which we can argue for others also to take action.
Economic instruments are clearly crucial and valuable and the EU emissions trading scheme is the best system, because the incentives go deep and accumulate as behaviour changes. Companies can make even more by selling allocations when they save carbon emissions, unlike merely saving a tax. However, the scheme covers less than half of total emissions and it should be tougher, both at EU level, with national plans, and by adding in sectors such as aviation, shipping and freight, and by auctioning more and allocating less.
The reality is that the scheme will not cover the gaping hole in the UKs climate change efforts, which is the transport sector. As the Select Committee on Environmental Audit reported in July, transport is the only sector where emissions have consistently increased since 1990. It is the key problem in the Governments emissions plan.
The Select Committee report on reducing carbon emissions from transport pointed out that with the addition of international aviation and shipping, total carbon dioxide emissions from the UK transport sector have increased by 18 per cent. since 1990. That is in contrast with every other sector of the economy, including farming, the public sector, business and the domestic sector, where the reductions in carbon emissions from 1990 to 2004 have been respectively 53 per cent., 28 per cent. 12 per cent. and 2 per cent.
Transport stands out, and there is no mystery as to why that is the case. The truth is that the Chancellor beat a retreat in the face of the fuel duty protests and since then green taxes, largely taxes on fossil fuels, as a share of national income have been falling steadily; down from 3.6 per cent. of national income in 1999 to 2.9 per cent. last year.
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