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Point of Order
4.42 pm
Sir Nicholas Winterton (Macclesfield) (Con): On a point of order, Mr. Deputy Speaker. The integrity of this House is very important, as I am sure you would agree. I understand that over the weekend there was publicity about a certain report by the Standards and Privileges Committee, which may well be published tomorrow, about the use of banqueting facilities in this House. Is it right that a report that has not yet been made to the House should become public knowledge? I ask you to investigate.
Mr. Deputy Speaker (Sir Alan Haselhurst): It will surely be taken as a serious matter, but it must in the first place be for the Committee itself to investigate whether its confidentiality has been breached.
Orders of the Day
Order read for resuming adjourned debate on Question [21 March].
Amendment of the Law
(1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—
(a) for zero-rating or exempting a supply, acquisition or importation,
(b) for refunding an amount of tax,
(c) for any relief, other than a relief that—
(i) so far as it is applicable to goods, applies to goods of every description, and
(ii) so far as it is applicable to services, applies to services of every description.— [Mr. Gordon Brown.]
Budget Resolutions and Economic Situation
4.43 pm
The Secretary of State for Environment, Food and Rural Affairs (David Miliband): I am delighted to open this third day of the Budget debate on the economy and the environment. It provides an opportunity to explore two key themes that will be central to our prosperity in the years ahead: first, the drive to build a low-carbon economy at home; and secondly, the need to maximise our contribution to the development of effective systems for emissions reduction around the world.
The Budget took important steps forward on curbing domestic emissions and contributing to international emissions reduction. It complemented measures in previous Budgets and pre-Budget reports, the Climate Change Bill and European negotiations. It set the stage for further measures in the next few months in the waste strategy, the energy White Paper and international discussions and negotiations, first in the G8 plus 5 in June and subsequently in the United Nations framework.
Vice-President Al Gore said— [Interruption.] The hon. Member for Cambridge (David Howarth) says that he spoke to him yesterday. I congratulate him on his choice of dining partners. The vice-president, who is recognised as an authentic voice on climate change, said that United Kingdom citizens should be proud of their record in contributing to the global fight against climate change. The starting point for the debate is, therefore, the UK’s record so far and international evidence on the science and politics of climate change.
UK greenhouse gas emissions, including emissions trading in 2005, the latest date for which data are available, were nearly 19 per cent. below their 1990 levels. The figure for carbon dioxide is 11 per cent. Since 1997, greenhouse gas emissions, including reductions achieved through the European Union emissions trading scheme, are down by 11 per cent. For carbon dioxide, the reduction—including through the EU ETS—is 4 per cent. Only the countries of central and eastern Europe, the economies of which have undergone a process of restructuring since 1990, match the UK for the scale of emissions reductions.
Our carbon reduction goals have not been fulfilled through economic austerity. In this country, we have enjoyed 58 successive quarters of economic growth. Our inflation, according to the internationally recognised measuring standard, has been the lowest in the G7 countries in the past 10 years. Since 1997, our interest rates have been half the 11 per cent. average of the previous 20 years. Employment is at a record high, and, all the while, greenhouse gas emissions have fallen. In other words, we have given the lie to the old choice of environment versus economy.
Martin Horwood (Cheltenham) (LD): The Secretary of State is proud of the Government’s record, but is not a large part of meeting the targets due to the dash for gas? Is not the trend in CO2 emissions and greenhouse gas emissions as a whole now upwards?
David Miliband: The latest figures for the household sector show that emissions are declining. I am happy to address the question about the dash for gas. It is true that the switch to gas reduced our CO2 and greenhouse emissions, in the same way that rising gas prices in the past three years have led to an increase in CO2 emissions.
Mr. Peter Ainsworth (East Surrey) (Con): Anyone listening to the Secretary of State might be misled into believing that the Government were meeting their environmental targets. Can he name a single target, other than the Kyoto target, which is being fulfilled largely because of the dash for gas, that is being met? What about the renewables target, the energy efficiency target, the biofuels target?
David Miliband: What have the Romans done for us other than created a new civilisation? Other than fulfilling the international standard, which is to reduce our greenhouse gas emissions by 12.5 per cent., I am happy to provide examples. What about our recycling commitments? When we came to office, this country was rightly perceived as a throwaway society, with 4 or 5 per cent. of waste going into recycling. The figure is now 27 per cent., which beats the target that we set. I am sorry that the hon. Gentleman has decided to start the debate in a rather churlish spirit because he and I agree that the UK has a good record by international standards, but that it has to do better. It would better become him if he admitted that.
The old choice was between the environment and the economy. The new choice is between low and high carbon development. Reducing emissions powers our economy forward, with 400,000 people working in environmental industries, compared with 170,000 only five years ago. Venture capital is moving into environmental industries, with London’s alternative investment market becoming the market of choice, listing more than 60 clean technology companies with a combined market capitalisation of more than £4 billion.
Meanwhile, Lehman Brothers—[Hon. Members: “It is pronounced “Leeman.”] I say “Leyman”, they say “Leeman”—I think we are talking about the same company. [Interruption.] Since I am British, I pronounce it “Leyman”; since they are American, they pronounce it “Leeman”. However, we are talking about the same
company of Lehman Brothers—the distinguished bank, which, I am pleased to say, has many operations in this country. It states that climate change is inexorably becoming one of the major forces that shapes business, and that that presents new opportunities and enables new business to appear and develop. But while we have broken the link between economic growth and carbon growth, we know the country as a whole—Government, businesses and individuals—has to do better. That is the rationale behind the climate change Bill, which I look forward to debating in the House, and also for the measures in the Budget and further measures to come.
Mr. David Heath (Somerton and Frome) (LD): I want to ask about aggregates tax. The right hon. Gentleman and I agree that we need to reduce the use of non-sustainable resources, but given that the prime driver is transport costs, is there any evidence to suggest that the aggregates levy has actually reduced the take of virgin stone or increased the use of recycled stone? Will not removing the direct environmental benefit for the local communities affected by quarrying create a pointless levy?
David Miliband: The short answer to whether there is any evidence is yes, but it might be best if I write to the hon. Gentleman to provide the extensive details, some of which, I think I am right in saying, were published in the Red Book last week. They show some of the changes made, but I will happily write with further details.
For the UK, there are four main sources of greenhouse gas emissions: electricity, heat, transport and waste disposal. Each needs to be addressed by a combination of Government, business and individual action. That is what the Government are determined to do. Let me start with electricity and heating supply.
It is remarkable that we can deliver more than 1 million tonnes of carbon reduction from the decision to make the UK the first country in Europe to phase out all high-energy light bulbs. Further significant reductions will come from consumer electronics and from reducing the power consumed in wasteful standby mode. Renewable energy, including wind energy, will cut carbon and a continued nuclear contribution is also important. “Wait and see” is not a sufficient policy in this area, but to drive down energy-related emissions we need to go further in respect of the business sector and households.
The business sector accounts for 40 per cent. of all carbon emissions. I am pleased that large businesses and large emitters are now covered by the European Union emissions trading scheme, covering nearly half of all carbon emissions in this country—and more than half if aviation is included. For medium emitters, we are consulting on an energy performance commitment, but small business needs high-quality advice on energy reduction. That is why the Chancellor announced that the regional development agencies are increasing their expenditure on environmental and energy efficiency initiatives from £140 million to £240 million over the next year. In addition, all firms, whether or not they are in taxable profit, will have access to an enhanced capital allowance for more than 14,000 energy-saving and water-efficient products.
Households constitute 34 per cent. of electricity emissions and changes in building regulations have raised energy efficiency standards by 40 per cent. since 1997, which is worth more than 1.5 million tonnes of carbon every year by 2010. We have reformed the planning rules for wind turbines so that they are no more difficult to install than a satellite dish, and we are committed to help all householders take advantage of cost-effective energy efficiency measures. We also believe that individuals should be able to export electricity more easily to the grid, which is why Ofgem is conducting a special study of how we can better reward people for taking the step of becoming an electricity producer, not just a consumer.
Peter Luff (Mid-Worcestershire) (Con): Has the Secretary of State given any consideration to the Trade and Industry Select Committee report and its proposal not to levy council tax increases on households that choose to carry out the sort of actions that he is now praising?
David Miliband: Under the energy efficiency commitment, council tax—or reductions in it—are already being used as incentives for such energy efficiency commitments and I certainly intend to work with my right hon. Friend the Secretary of State for Trade and Industry, whom I see by my side on the Government Front Bench, to ensure that an appropriate response is made to the Select Committee’s work.
We also know that the fight against global warming needs new technologies such as carbon capture and storage. The principle is simple: instead of carbon dioxide from fossil fuels being released into the atmosphere, it is captured at source and stored safely underground. The results are transformational, with about 85 to 90 per cent. of carbon emissions removed from coal-fired power stations. The requirement is now urgent, which is why we are determined to have a demonstration plant in the UK, why a competition is now being launched by the Secretary of State for Trade and Industry, and why we want to show the world, especially developing countries, that this is not a technology to fear, but one to embrace.
The third main area of transport represents around a quarter of carbon dioxide emissions. The pre-Budget report made commitments in respect of aviation that will save the equivalent of 750,000 tonnes of carbon a year by 2010-11, but surface transport—mainly from cars, vans and lorries—is 93 per cent. of the total.
Mr. Nick Hurd (Ruislip-Northwood) (Con): On aviation, will the Secretary of State confirm that he argued to the Chancellor of the Exchequer that VAT should be introduced on domestic flights and, if so, why does he think he lost the argument?
David Miliband:
I am glad that the hon. Gentleman raised that issue. One of the joys of the real world of government, rather than the dream world of opposition, is that collective discussion sorts out the best proposals from the not-so-good proposals. That is why— [Interruption.] If Opposition Members will contain themselves, that is why I was delighted that the
Chancellor embraced the air passenger duty proposal, which was in the same letter about which the hon. Gentleman is so excited.
Mr. Brooks Newmark (Braintree) (Con): Will the Secretary of State therefore confirm that he will follow the example of the Leader of the House and join the Chancellor’s campaign team?
David Miliband: I have not yet been asked to join the campaign team, but I assure the hon. Gentleman, who will be concerned about the issue, that, as I have said for three years, the Chancellor of the Exchequer is an outstanding Prime Minister in waiting, and I believe that he will do outstanding service for the country—[Hon. Members: “As Chancellor or Prime Minister?] As Prime Minister—for some reason, there are some suspicious minds in the House. I am happy to assure Opposition Members that the Chancellor of the Exchequer will be sitting on this side of the House as Prime Minister for a long time to come.
Surface transport accounts for 93 per cent. of the total, mainly from cars and lorries. It is right that we give incentives to all individuals to choose fuel-efficient ways of motoring. Were every car owner to purchase the most efficient vehicle in their current class of car, average CO2 emissions across the UK fleet would fall by 30 per cent. The commitments on fuel duty, over the three years, make that choice more likely. We predict that they will save 160,000 tonnes of carbon a year by 2016. Fuel-efficient cars in band B have CO2 emissions of about half those in band G. We now have a graduated vehicle excise duty system, so that cars in band G will next year face a tax rate of more than 10 times the level for band B.
Mr. Ben Wallace (Lancaster and Wyre) (Con): While it is perfectly laudable to try to reduce inappropriate use of vehicles, such as 4x4s, perhaps in the city, does the Secretary of State recognise that the measure is rather unfair to those of my constituents who are farm labourers, shepherds and uplands farmers, who must use 4x4s for their job? Checking the sheep at 4 am in a Nissan Micra is totally inappropriate. Does he recognise that the proposal is too blunt an instrument?
David Miliband: I am sure that the hon. Gentleman is as delighted as I am that there is a lower poverty rate in rural areas than in urban areas, and that poverty is falling faster in rural areas than in urban areas.
Mr. James Paice (South-East Cambridgeshire) (Con): Will the Secretary of State address the issue raised by my hon. Friend the Member for Lancaster and Wyre (Mr. Wallace)? The issue is not poverty in rural areas, although we know from the Government’s own advisers that 20 per cent. of rural people live in poverty. The reality is that many thousands of people require powerful engines for their work—towing trailers, four-wheel-drive pick-ups and so on. Of course we need to stop the use of 4x4s—although the issue goes beyond 4x4s—in wholly unnecessary circumstances. But does he accept that it is necessary to devise a new class for those who genuinely need a powerful engine as part of their work, and who might fall foul of the regulations? Will he discuss that with the Chancellor?
David Miliband: The hon. Gentleman speaks on these matters with expertise and commitment, and I take his point seriously. Obviously, we think that the principle of a graduated VED system makes sense. Different people have to make different choices for all sorts of reasons. This is not about forcing Nissan Micras down the throats of farmers, as was suggested earlier. However, if we are to have a graduated system that does not become impossibly complex to administer—for example, many people in rural areas might have a larger car but will not drive it only in that area—there will always be a balance to be struck with simplicity. I am sure that he would not want an over-bureaucratic scheme. If he wants to write to me or the Chancellor, however, or if the hon. Member for Lancaster and Wyre wants to make a specific proposal, we will consider it seriously. We try to strike a balance between the environmental, economic and social parts of the equation. A simpler system is always an advantage.
Mr. Newmark: Does the Secretary of State accept that VED is still a tax on ownership and not usage? Surely we should have a strategy under which the polluter pays. That should drive our strategy.
David Miliband: The hon. Gentleman makes a good case for the measures across the board that the Chancellor announced last week. I look forward to him persuading his own Front Benchers to set out their position on fuel duty, which has not been clarified.
We also need to explore the scope for a large-scale shift away from fossil fuel-based transportation. For reasons of environmental and economic security, it is right that we look to a future in which we no longer use petrol to get around.
Kelvin Hopkins (Luton, North) (Lab): On that important point, is my right hon. Friend aware that road freight pushes out 12 times as much carbon dioxide as the equivalent rail freight? It would be a tremendous advantage if we could get more freight on to rail. In that respect, will he support the scheme that I proposed, in an Adjournment debate, to build a railway line from Glasgow to the channel tunnel? The railway line would be dedicated to rail freight, link all the industrial areas of Britain and take 5 million lorries off the roads every year.
David Miliband: I believe that there has been a 35 per cent. increase in passenger numbers on the railways and an almost equivalent increase in freight numbers—I am happy to write to my hon. Friend with the details. Tempting as it is for me to do the job of the Secretary of State for Transport, the fairest thing that I can say is that I will look at his scheme. No doubt, my right hon. Friend will also consider it.
Countries such as Brazil decided, about 25 years ago, to shift away from fossil fuel-based surface transport methods. The Chancellor has asked Professor Julia King to work with Sir Nicholas Stern to look into the benefits of taking carbon out of surface transport over the next 25 years by using electric or hydrogen-powered cars. My right hon. Friend the Transport Secretary will shortly announce the terms of reference of that work.
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