Examination of Witnesses (Questions 80-87
MR NICK
EYRE AND
MR BRIAN
SAMUEL
1 FEBRUARY 2006
Q80 Chairman: Just following up David's
point, which I think is rather an important one, I can see that
if you whacked up the cost in this country people are going to
buy abroad and import them, but you could give big discounts.
It is VAT actually which is charged on a new car—or is it
purchase tax as well? Car tax. There does not have to be one way.
The move does not have to orbit upwards. You could have a discount
for the most fuel-efficient and if the Treasury says, "We
need to make up the revenue," just increase the fuel tax.
So you could have a revenue-neutral package which gave people
a signal at the time of purchase and whenever they renewed a licence
each year. All the time they are being reminded—this is
an educational benefit as well—of the desirability of choosing
the fuel-efficient vehicle. That would be possible, would it not?
Mr Samuel: We are not against
other mechanisms to provide the same signal, but from our perspective
the VED being the annual reminder was one of the strong selling
points of that.
Mr Eyre: There has been research
on that sort of combining penalties and essentially grants for
more efficient vehicles.
Chairman: If it is not too difficult,
I think any research which is available on that general topic
would be quite interesting.
Q81 Joan Walley: Could I just press you
a little more in terms of everything you have said throughout
the evidence on engagement with the public and just how much you
think, through the various consumer magazines, and so on and so
forth, these incentives are actually in the public realm so that
people are falling over themselves to go for a greener vehicle
as a result of having the tax deductions which we are speaking
about?
Mr Eyre: We do see there is a
difference in what is happening on household energy efficiency,
where there is quite extensive awareness-raising and advice programmes.
We have a very significant advice programme which actually advises
people what they can do in their homes given their specific circumstances.
There is a contrast between that and what is happening in transport.
We do now have, of course, car labelling, which is a big step
forward, to get cars labelled at the point of purchase with an
A to G type label, but we still think there is a case for going
further than that and really providing more detailed advice to
people on that and drawing people's attention to the label. All
our experience from appliance labelling is that just relying on
a label is insufficient and we are talking to DfT about what more
we could do in this area as an organisation.
Q82 Joan Walley: What interest is there
from businesses, car manufacturers or car retailers in this?
Mr Eyre: I think there is some
interest from car retailers. The manufacturers and retailers voluntarily
signed up to a labelling provision. I think at least some of them
recognised that it would be useful to provide better information
and advice to consumers.
Q83 Chairman: Just taking the labelling
issue one stage further, if the VED bands were extended, and so
on, it would be possible, would it not, to have a colour-coded
licence disc which showed everyone as you walked around the street
which category your vehicle came into? Given the feeling some
of us have that pressure from young people can be quite strong,
it would be possible, perhaps, to see peer group pressure within
a family, with children saying to their parents, "Why have
we got a red label and my friend's parents have got a green label?"
Mr Eyre: It would certainly be
possible and administratively, of course, it makes complete sense
to have the same system for taxation as for labelling, and indeed
they are aligned at the moment. We have not undertaken any market
research on how effective that would be, either on adults or on
adults via their children.
Q84 Chairman: But it would be quite cheap,
just printing one more colour?
Mr Eyre: I do not know the answer
to that question.
Q85 Colin Challen: On the Transport Fuel
Obligation, you support that idea, but not if the fuel is sourced
from areas which endangered tropical forests or threatened biodiversity.
How do you think the Government could control that, and would
it add to the cost of the fuel possibly?
Mr Samuel: I think you do need
to have both carbon and sustainability integrity within the scheme,
otherwise it is self-defeating. Yes, it will add to the cost,
but we think it is necessary to do so. Further work will be required
to actually understand how best to actually guarantee that sustainability
of where the biofuels come from externally (to the UK). We are
not experts in that specific field.
Q86 Colin Challen: Which specific fuels
may you be talking about?
Mr Eyre: We are talking about
some of the oils which might be sourced from areas which are subject
to deforestation in particular.
Q87 Dr Turner: Palm oil?
Mr Eyre: That is certainly one
of them, yes.
Chairman: Good. I think we have covered
some very useful ground. I apologise again for firstly keeping
you waiting and then we had, outside of our control, the interruption
of the division, so you have been kept a bit longer than we would
have liked. Thank you for coming in and I am sure we shall be
continuing the dialogue with you in the coming months.
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