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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,
16 Oct 2006 : Column 654
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 ahead—and 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

Mr. Adrian Sanders (Torbay) (LD) rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 218, Noes 295.
Division No. 304]
[7.29 pm


Afriyie, Adam
Ainsworth, Mr. Peter
Alexander, Danny
Amess, Mr. David
Atkinson, Mr. Peter
Bacon, Mr. Richard
Baker, Norman
Barker, Gregory
Baron, Mr. John
Barrett, John
Beith, rh Mr. Alan
Bellingham, Mr. Henry
Benyon, Mr. Richard
Bercow, John
Binley, Mr. Brian
Blunt, Mr. Crispin
Bone, Mr. Peter
Bottomley, Peter
Brake, Tom
Brazier, Mr. Julian
Breed, Mr. Colin
Brokenshire, James
Brooke, Annette
Browning, Angela

Bruce, rh Malcolm
Burns, Mr. Simon
Burrowes, Mr. David
Burstow, Mr. Paul
Burt, Alistair
Burt, Lorely
Butterfill, Sir John
Cable, Dr. Vincent
Campbell, rh Sir Menzies
Carswell, Mr. Douglas
Chope, Mr. Christopher
Clappison, Mr. James
Clark, Greg
Clarke, rh Mr. Kenneth
Clegg, Mr. Nick
Clifton-Brown, Mr. Geoffrey
Cox, Mr. Geoffrey
Crabb, Mr. Stephen
Curry, rh Mr. David
Davey, Mr. Edward
Davies, Mr. Dai
Davies, Philip
Davies, Mr. Quentin
Djanogly, Mr. Jonathan
Dorries, Mrs. Nadine
Duddridge, James
Duncan, Mr. Alan
Duncan Smith, rh Mr. Iain
Dunne, Mr. Philip
Ellwood, Mr. Tobias
Evennett, Mr. David
Fabricant, Michael
Fallon, Mr. Michael
Farron, Tim
Featherstone, Lynne
Field, Mr. Mark
Foster, Mr. Don
Fox, Dr. Liam
Francois, Mr. Mark
Gale, Mr. Roger
Garnier, Mr. Edward
Gauke, Mr. David
George, Andrew
Gibb, Mr. Nick
Gidley, Sandra
Goldsworthy, Julia
Goodman, Mr. Paul
Goodwill, Mr. Robert
Gove, Michael
Gray, Mr. James
Grayling, Chris
Green, Damian
Greening, Justine
Greenway, Mr. John
Grieve, Mr. Dominic
Gummer, rh Mr. John
Hague, rh Mr. William
Hammond, Mr. Philip
Hammond, Stephen
Hancock, Mr. Mike
Hands, Mr. Greg
Harper, Mr. Mark
Harris, Dr. Evan
Harvey, Nick
Heath, Mr. David
Hemming, John
Hendry, Charles
Herbert, Nick
Hogg, rh Mr. Douglas
Hollobone, Mr. Philip
Holloway, Mr. Adam
Holmes, Paul
Horam, Mr. John
Horwood, Martin
Hosie, Stewart
Howarth, David
Hughes, Simon
Huhne, Chris
Hunt, Mr. Jeremy
Hunter, Mark
Hurd, Mr. Nick
Jack, rh Mr. Michael
Jackson, Mr. Stewart
Jenkin, Mr. Bernard
Jones, Mr. David
Kawczynski, Daniel
Keetch, Mr. Paul
Kennedy, rh Mr. Charles
Key, Robert
Kirkbride, Miss Julie
Kramer, Susan
Laing, Mrs. Eleanor
Lait, Mrs. Jacqui
Lamb, Norman
Lansley, Mr. Andrew
Laws, Mr. David
Leech, Mr. John
Letwin, rh Mr. Oliver
Lewis, Dr. Julian
Lidington, Mr. David
Lilley, rh Mr. Peter
Llwyd, Mr. Elfyn
Loughton, Tim
Luff, Peter
Mackay, rh Mr. Andrew
Maclean, rh David
MacNeil, Mr. Angus
Malins, Mr. Humfrey
Maples, Mr. John
May, rh Mrs. Theresa
McIntosh, Miss Anne
McLoughlin, rh Mr. Patrick
Mercer, Patrick
Milton, Anne
Moss, Mr. Malcolm
Mulholland, Greg
Murrison, Dr. Andrew
Neill, Robert
Newmark, Mr. Brooks
O'Brien, Mr. Stephen
Oaten, Mr. Mark
Öpik, Lembit
Osborne, Mr. George
Ottaway, Richard
Paice, Mr. James
Paisley, rh Rev. Ian
Paterson, Mr. Owen
Pelling, Mr. Andrew
Penning, Mike
Penrose, John
Pickles, Mr. Eric
Price, Adam
Prisk, Mr. Mark
Pritchard, Mark
Pugh, Dr. John
Randall, Mr. John
Redwood, rh Mr. John
Reid, Mr. Alan
Rennie, Willie
Rifkind, rh Sir Malcolm
Robathan, Mr. Andrew
Robertson, Angus
Robertson, Hugh
Robertson, Mr. Laurence

Rogerson, Mr. Dan
Rowen, Paul
Ruffley, Mr. David
Russell, Bob
Sanders, Mr. Adrian
Scott, Mr. Lee
Selous, Andrew
Shepherd, Mr. Richard
Simmonds, Mark
Simpson, Mr. Keith
Smith, Sir Robert
Soames, Mr. Nicholas
Spelman, Mrs. Caroline
Spicer, Sir Michael
Spink, Bob
Spring, Mr. Richard
Stuart, Mr. Graham
Stunell, Andrew
Swayne, Mr. Desmond
Swinson, Jo
Syms, Mr. Robert
Tapsell, Sir Peter
Taylor, Matthew
Taylor, Dr. Richard
Teather, Sarah
Turner, Mr. Andrew
Tyrie, Mr. Andrew
Vaizey, Mr. Edward
Vara, Mr. Shailesh
Viggers, Peter
Villiers, Mrs. Theresa
Walker, Mr. Charles
Wallace, Mr. Ben
Walter, Mr. Robert
Waterson, Mr. Nigel
Watkinson, Angela
Weir, Mr. Mike
Whittingdale, Mr. John
Widdecombe, rh Miss Ann
Wiggin, Bill
Williams, Hywel
Williams, Mark
Williams, Stephen
Willis, Mr. Phil
Willott, Jenny
Wilson, Mr. Rob
Wright, Jeremy
Yeo, Mr. Tim
Young, rh Sir George
Younger-Ross, Richard
Tellers for the Ayes:

Mr. Jeremy Browne and
Mr. Roger Williams

Abbott, Ms Diane
Ainger, Nick
Ainsworth, rh Mr. Bob
Alexander, rh Mr. Douglas
Allen, Mr. Graham
Armstrong, rh Hilary
Atkins, Charlotte
Austin, Mr. Ian
Bailey, Mr. Adrian
Balls, Ed
Banks, Gordon
Barlow, Ms Celia
Barron, rh Mr. Kevin
Battle, rh John
Bayley, Hugh
Begg, Miss Anne
Benton, Mr. Joe
Berry, Roger
Betts, Mr. Clive
Blackman, Liz
Blackman-Woods, Dr. Roberta
Blears, rh Hazel
Blizzard, Mr. Bob
Borrow, Mr. David S.
Bradshaw, Mr. Ben
Brennan, Kevin
Brown, Lyn
Browne, rh Des
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Butler, Ms Dawn
Byers, rh Mr. Stephen
Byrne, Mr. Liam
Caborn, rh Mr. Richard
Campbell, Mr. Alan
Campbell, Mr. Ronnie
Caton, Mr. Martin
Cawsey, Mr. Ian
Chapman, Ben
Chaytor, Mr. David
Clapham, Mr. Michael
Clark, Ms Katy
Clark, Paul
Clarke, rh Mr. Charles
Clarke, rh Mr. Tom
Clelland, Mr. David
Coaker, Mr. Vernon
Coffey, Ann
Cohen, Harry
Connarty, Michael
Cooper, Yvette
Corbyn, Jeremy
Cousins, Jim
Crausby, Mr. David
Creagh, Mary
Cruddas, Jon
Cummings, John
Cunningham, Mr. Jim
Cunningham, Tony
Curtis-Thomas, Mrs. Claire
Darling, rh Mr. Alistair
David, Mr. Wayne
Davidson, Mr. Ian
Dean, Mrs. Janet
Devine, Mr. Jim
Dhanda, Mr. Parmjit
Dismore, Mr. Andrew
Dobbin, Jim
Donohoe, Mr. Brian H.
Doran, Mr. Frank
Dowd, Jim
Drew, Mr. David
Dunwoody, Mrs. Gwyneth
Durkan, Mark
Eagle, Angela
Efford, Clive
Ellman, Mrs. Louise
Engel, Natascha
Farrelly, Paul
Field, rh Mr. Frank
Fisher, Mark
Fitzpatrick, Jim

Flello, Mr. Robert
Flint, Caroline
Flynn, Paul
Follett, Barbara
Foster, Mr. Michael (Worcester)
Foster, Michael Jabez (Hastings and Rye)
Francis, Dr. Hywel
Gapes, Mike
Gardiner, Barry
George, rh Mr. Bruce
Gerrard, Mr. Neil
Gibson, Dr. Ian
Gilroy, Linda
Godsiff, Mr. Roger
Goodman, Helen
Griffith, Nia
Griffiths, Nigel
Grogan, Mr. John
Gwynne, Andrew
Hall, Mr. Mike
Hall, Patrick
Hamilton, Mr. David
Hamilton, Mr. Fabian
Harris, Mr. Tom
Healey, John
Henderson, Mr. Doug
Hendrick, Mr. Mark
Heppell, Mr. John
Hesford, Stephen
Hewitt, rh Ms Patricia
Heyes, David
Hill, rh Keith
Hillier, Meg
Hodge, rh Margaret
Hodgson, Mrs. Sharon
Hoey, Kate
Hood, Mr. Jimmy
Hope, Phil
Hopkins, Kelvin
Howarth, rh Mr. George
Hoyle, Mr. Lindsay
Hughes, rh Beverley
Humble, Mrs. Joan
Hutton, rh Mr. John
Iddon, Dr. Brian
Illsley, Mr. Eric
James, Mrs. Siân C.
Jenkins, Mr. Brian
Johnson, rh Alan
Johnson, Ms Diana R.
Jones, Helen
Jones, Mr. Kevan
Jones, Lynne
Jones, Mr. Martyn
Jowell, rh Tessa
Joyce, Mr. Eric
Kaufman, rh Sir Gerald
Keeble, Ms Sally
Keeley, Barbara
Keen, Alan
Keen, Ann
Kelly, rh Ruth
Kemp, Mr. Fraser
Khabra, Mr. Piara S.
Khan, Mr. Sadiq
Kidney, Mr. David
Knight, Jim
Ladyman, Dr. Stephen
Lammy, Mr. David
Laxton, Mr. Bob
Lazarowicz, Mark
Lepper, David
Levitt, Tom
Lewis, Mr. Ivan
Lloyd, Tony
Love, Mr. Andrew
Lucas, Ian
MacShane, rh Mr. Denis
Mactaggart, Fiona
Mahmood, Mr. Khalid
Malik, Mr. Shahid
Mallaber, Judy
Mann, John
Marris, Rob
Marsden, Mr. Gordon
Marshall-Andrews, Mr. Robert
Martlew, Mr. Eric
McAvoy, rh Mr. Thomas
McCabe, Steve
McCafferty, Chris
McCarthy, Kerry
McCarthy-Fry, Sarah
McCartney, rh Mr. Ian
McDonagh, Siobhain
McFadden, Mr. Pat
McFall, rh John
McGovern, Mr. Jim
McGuire, Mrs. Anne
McIsaac, Shona
McKechin, Ann
McKenna, Rosemary
Meale, Mr. Alan
Merron, Gillian
Michael, rh Alun
Milburn, rh Mr. Alan
Miliband, rh David
Miliband, Edward
Miller, Andrew
Mitchell, Mr. Austin
Moffatt, Laura
Mole, Chris
Moon, Mrs. Madeleine
Moran, Margaret
Morden, Jessica
Morley, Mr. Elliot
Mountford, Kali
Mudie, Mr. George
Mullin, Mr. Chris
Munn, Meg
Murphy, Mr. Jim
Murphy, rh Mr. Paul
Naysmith, Dr. Doug
O'Brien, Mr. Mike
O'Hara, Mr. Edward
Olner, Mr. Bill
Osborne, Sandra
Owen, Albert
Palmer, Dr. Nick
Pearson, Ian
Plaskitt, Mr. James
Prentice, Bridget
Prentice, Mr. Gordon
Prescott, rh Mr. John
Primarolo, rh Dawn

Prosser, Gwyn
Purchase, Mr. Ken
Purnell, James
Rammell, Bill
Raynsford, rh Mr. Nick
Reed, Mr. Jamie
Reid, rh John
Riordan, Mrs. Linda
Robertson, John
Robinson, Mr. Geoffrey
Rooney, Mr. Terry
Roy, Mr. Frank
Ruane, Chris
Ruddock, Joan
Russell, Christine
Ryan, Joan
Seabeck, Alison
Shaw, Jonathan
Sheerman, Mr. Barry
Sheridan, Jim
Simon, Mr. Siôn
Simpson, Alan
Singh, Mr. Marsha
Skinner, Mr. Dennis
Slaughter, Mr. Andrew
Smith, rh Mr. Andrew
Smith, Ms Angela C. (Sheffield, Hillsborough)
Smith, Geraldine
Smith, rh Jacqui
Smith, John
Snelgrove, Anne
Soulsby, Sir Peter
Southworth, Helen
Spellar, rh Mr. John
Starkey, Dr. Phyllis
Stewart, Ian
Stoate, Dr. Howard
Strang, rh Dr. Gavin
Straw, rh Mr. Jack
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Mr. Gerry
Tami, Mark
Taylor, Ms Dari
Taylor, David
Thornberry, Emily
Timms, rh Mr. Stephen
Tipping, Paddy
Todd, Mr. Mark
Touhig, rh Mr. Don
Trickett, Jon
Truswell, Mr. Paul
Turner, Dr. Desmond
Turner, Mr. Neil
Twigg, Derek
Ussher, Kitty
Vaz, rh Keith
Vis, Dr. Rudi
Walley, Joan
Waltho, Lynda
Wareing, Mr. Robert N.
Watson, Mr. Tom
Whitehead, Dr. Alan
Wicks, Malcolm
Williams, rh Mr. Alan
Williams, Mrs. Betty
Wills, Mr. Michael
Winnick, Mr. David
Winterton, rh Ms Rosie
Wood, Mike
Woodward, Mr. Shaun
Woolas, Mr. Phil
Wright, Mr. Anthony
Wright, David
Wright, Mr. Iain
Wright, Dr. Tony
Wyatt, Derek
Tellers for the Noes:

Mr. Dave Watts and
Huw Irranca-Davies
Question accordingly negatived.
16 Oct 2006 : Column 655

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16 Oct 2006 : Column 658

Question, That the proposed words be there added , put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.

Mr. Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.


16 Oct 2006 : Column 659

Green Taxes

Mr. Deputy Speaker (Sir Alan Haselhurst): We now come to the debate on the green tax switch. Mr. Speaker has selected the amendment in the name of the Prime Minister.

7.45 pm

Chris Huhne (Eastleigh) (LD): I beg to move,

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.

The key reason for the green tax switch is as part of a comprehensive package—not the whole of it, but a part—to tackle British carbon emissions.

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.

16 Oct 2006 : Column 660

Globally, the evidence is also compelling. In the past 10 years alone we have suffered the most powerful el NiƱo 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 Government’s 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 UK’s 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 Government’s 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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