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I am also extremely worried that after I intervened earlier the Secretary of State was entirely unable to tell the House what the environmental or climate change
impact of the Budget would be. The Red Book devotes a whole chapter to the environment and hardly a week goes by when the Chancellor and his Treasury team do not tell us that it is essential that there should be environmental impact assessments and assessments of compliance costs, yet the Secretary of State is unable to tell us what the impact of these measures will be. I look forward to hearing his reply, because the research that we have conducted appears to show that they will have the combined effect of reducing the amount of carbon emissions by about 330,000 tonnes—or 0.15 per cent. of the UK’s total. That makes the point that this is far from the planned route march towards a decarbonised economy that is essential if we are to grasp our opportunity.
Transport has largely been ignored on the tax side, yet its emissions are key. The Environmental Audit Committee’s recent report told us that such emissions have increased by 18 per cent., yet the Chancellor, as we all know, was spooked by the fuel duty protests in 2000 and since then, green taxation as a share of gross domestic product—the only sensible measurement of the tax burden—has fallen from 3.6 per cent of GDP in 1999 to 2.9 per cent. on the latest figures.
Is that a good measure of effort? It is a summary measure. The idea that if green taxes work they may vanish is simply wrong, because a continued high tax and high price on bad activities may be necessary to sustain a continued change in demand. Many Chancellors have discovered that sin taxes pay, and this Chancellor would have an exceptionally large hole in his Budget if he were not able to rely on the ongoing revenue from tobacco and alcohol.
The specifics of this Budget on the environment, and on taxation in particular, are not good. The Liberal Democrats are unequivocal that the vehicle excise duty changes do not go far enough; we know exactly what the likely impact of the increase to £400 will be, because the Energy Saving Trust commissioned a MORI opinion poll that examined the likely impact on purchases. It found that 33 per cent. of car purchasers were likely to change their view as a result of that increase in vehicle excise duty.
David Miliband: The hon. Gentleman has used the Energy Saving Trust’s figure that there will be an impact on 33 per cent. of people. Will he confirm that he is citing a poll from 2003 and that the differential in the bands was £50? There was not the £300 to £400 versus £35 differential that will exist.
Chris Huhne: I can confirm that the poll was from 2003, but it is the latest poll that has been conducted. The Secretary of State is misinformed if he believes that the use of the £50 per band is inappropriate, because the £400 applies to band G—the highest band—and if one were to add up the £50 for each step, funnily enough one would reach that sort of figure. I am sorry that his arithmetic is as challenged as it appears. I rest my case: if we were to adopt the £2,000 figure that the Liberal Democrats have proposed, we would change the purchasing decisions of 72 per cent. of the population, rather than 33 per cent.
Moreover, the element of retrospection that would be avoided were the duty to be imposed only on newly purchased vehicles would make it a substantially more
saleable proposition, not least in rural areas. As those who have been concerned about that issue know, a number of working 4x4 vehicles do not fall into the top category. Liberal Democrats believe that it is important that we have measures that support rural communities in their proper business.
On the aviation proposals, we have seen that the increase from £5 to £10 merely gets the Chancellor back to where he first started. There is nothing in these proposals to base our national aviation tax on the emissions of the flight, which is the only sensible way to proceed, because doing so would ensure that where a flight takes off half full the amount of tax that is paid is not halved. There would be an incentive to fill up the flight and the airline would have an incentive to move more rapidly towards having low emissions aircraft.
Green taxes can be popular providing that—this deals with the worst charge against the Chancellor—there is a clear guarantee to hand the money back. We know from opinion poll evidence from Populus that 71 per cent. of the British population will back green taxes if they are not regarded as a stealth tax and if the revenue is handed back. However, 62 per cent. of the population do not believe that that is what the Chancellor is doing—unfortunately, they believe that he is merely raising revenue in another stealth tax.
Rob Marris: My understanding is that the hon. Gentleman’s party’s proposal—certainly last year, although it may of course have changed by now—is to raise about £18 billion through green taxes. He likened green taxes to sin taxes, in that they would become a permanent part of the Government’s revenue-raising measures and so would not be designed to change behaviour, but now he talks about giving things back. There is a contradiction in his position.
Chris Huhne: The hon. Gentleman is a highly intelligent Member of the House and knows very well that changing behaviour on an ongoing basis often requires ongoing changes in price. Green taxes will change people’s behaviour. For example, in the case of vehicle excise duty, 72 per cent. of the population will change the car purchases that they make, but that will leave 28 per cent. continuing to buy gas guzzlers and paying substantially more as a result.
The Environment Secretary seems to “get” a lot of this agenda, judging by his interesting Budget submission to the Chancellor. I will not intrude on his embarrassment, since the hon. Member for East Surrey has already quoted it in extenso; nor will I quote from Lord Turnbull’s remarks to the effect that if you want something done about the environment you do not talk to David Miliband.
Madam Deputy Speaker (Sylvia Heal): Order. I remind the hon. Gentleman that the correct parliamentary terms should be used when referring to Members of this House.
Chris Huhne: Thank you, Madam Deputy Speaker; I stand corrected.
It is regrettable that the Secretary of State talks a good deal more sense about these matters than the Chancellor. It is also regrettable that he has not yet decided to throw his hat into the ring for the
leadership— [I nterruption. ] Speaking from experience, I recommend it. He has the perfect qualification for running for the leadership, and indeed the premiership, which is that the Chancellor does not listen to a word he says.
The Budget contains something to be recommended, but there is no fundamental strategy for the long route march to decarbonise the UK economy and the world economy. That means that it is ultimately an unsatisfactory and disappointing Budget. The reason why the strategy is not there is simple—the Chancellor does not “get” the green agenda. He does not understand the environmental agenda or the nature and all-encompassing threat that climate change poses to our society and to our economy—if he did, he would be far more radical.
Andrew Selous (South-West Bedfordshire) (Con): On a point of order, Madam Deputy Speaker. I seek your guidance. On the Order Paper, there is listed for publication today a written ministerial statement from the Department for Communities and Local Government. It is a very important statement about local government reorganisation. I have just come from the Library, where, at 2 minutes past 6, that statement was not present. I was further informed by Library staff that they had been told by the Department that it might not even be forthcoming at any point today. Can you advise me and the House, Madam Deputy Speaker, whether it is in order for a Department to put down on the Order Paper a written statement and then not produce it at all on the day in question?
Madam Deputy Speaker: Clearly, the hon. Gentleman’s remarks will have been noted by the Department in question, and I hope that it will do its very best to get the statement into the Library.
6.14 pm
Emily Thornberry (Islington, South and Finsbury) (Lab): A decade ago, the major political issues were interest rates, unemployment and economic chaos. People wanted us to fix it and to get a grip, and we have. We have changed the country—fundamentally and for the better—but in doing so we have changed what people want from their Government. I can tell the House that what people in Islington want has changed. I want to talk about some of the new priorities in my constituency—climate change, affordable housing, child poverty, and treatment of the marginalised. Although my constituents’ priorities have changed, what has not changed is their belief that the problems that we face can be tackled only by radical, collective action.
Only the most ridiculously partisan observers would deny that one of the greatest achievements of this Labour Government over the past 10 years has been economic growth and stability. Looking back to the time before 1997, it is difficult to believe that before we introduced spending reviews with their three-year rolling programmes, Government Departments knew only from year to year what funding they were going to get. They lurched around between lean and fat years. They were dependent on boom and bust, and on whether their Department was fashionable or their Minister was in favour with the Prime Minister. It must
have been a nightmare to plan anything. We have changed all that and allowed for the planning of good and stable government. Because of Labour, the British Government are well placed to take a stable and strategic view of what they are going to do domestically to tackle the biggest challenge of our generation—climate change—and able to take a lead in the world.
The draft Climate Change Bill will introduce radical change in the way that Governments work. It is based on the principles in the Climate Change Bill that I was proud to sponsor and promote. When introduced, the Bill will be the first example of its kind. It will have legally binding targets for carbon emissions. It anticipates the first carbon budget period being between 2008 and 2012, which is roughly concurrent with the comprehensive spending review and its parallel public spending agreements. The Government now have an opportunity to tie together their investment and activity with our obligations to cut emissions under Kyoto and our own self-imposed obligations under the draft Bill.
However, we need to be brave and bold and to get on with it. I hope that this will mean that even greater improvements are made to public transport infrastructure in London and that Londoners will be able to look forward to increased investment in that infrastructure, with projects such as Crossrail and the continuing refurbishment of tube lines and stations, including the hugely welcome rebirth of St. Pancras. We will get the joining up of the East London line with Highbury and Islington and the breathing of new life into the tragically neglected North London line. We will get hybrid buses introduced across London—first, I hope, on to Islington’s badly polluted streets. We will get continuing investment in the network of cycle paths and facilities that are so encouraging cyclists in London. I speak as chair of the all-party group on cycling. All that will allow the powerhouse of the British economy—London—to cut its carbon emissions while allowing our economy to continue to grow.
While on the subject of climate change and the support given to environmental policies by the Budget, let me take this opportunity to welcome the increase in vehicle excise duty on the most polluting vehicles—up from £210 last year to £300 this year and £400 in 2008-09. When I was a member of the Environmental Audit Committee, we called for the top band—band G— to be “significantly raised”, and I am pleased that in the two years since our report was published the tax on gas guzzlers will have doubled. Let me put it another way. By 2009, the cost of road tax for the biggest and most excessive Chelsea tractor—a Range Rover with a 4.4 litre Jaguar-sourced V8 engine—will be more than 10 times that of a Toyota Prius, and so it should be. The hon. Member for East Surrey (Mr. Ainsworth) seemed to commit the Conservative party to a much higher band G for 4x4s in cities. I agree. I hope that the Government listen and go further. However, I should say to the hon. Gentleman that the hon. Member for Hammersmith and Fulham (Mr. Hands), who was sitting behind him, did not look the slightest bit happy about the Conservatives seeming to make that commitment.
Mr. Newmark: The hon. Lady has talked about how much tax will be raised and how much more is raised by one vehicle versus another, but she has not addressed the real issue—taxing in order to change behaviour. What does the Chancellor’s Budget contain in that regard?
Emily Thornberry: I agree that the purpose of green taxes should always be to change behaviour and I believe that we should do it progressively so that, if behaviour changes and, for example, people buy a smaller car, they do not need to pay so much tax. In that way, we can change behaviour and say to people, “Go this way and we will help you.” However, that is not the Liberal Democrats’ approach, which is to set green taxes simply to raise revenue. It is interesting that their documents do not mention the amount of carbon emissions that will be saved by their green taxes.
The changes in vehicle excise duty, combined with the planned increases in fuel duty in the next three years, show the direction of Government policy. That is the sort of large, brightly lit—solar powered, of course—road sign that shows the Government’s direction and where we expect to go together. Those of us who are alarmed by global warming should stand and applaud the Government for their lead. However, while encouraging them, we should also urge them to go further.
Our homes produce one third of the UK’s carbon emissions and we cannot rely on enlightened self-interest to solve the problem by erecting a windmill here and changing a car there. We must work collectively and we need a Government who will step in to bring people together. I welcome the way in which the Budget does that.
David Taylor (North-West Leicestershire) (Lab/Co-op): The Environment, Food and Rural Affairs Committee, of which I am a member, visited Freiburg in south-west Germany, near the Black forest, only a few weeks ago to ascertain the reason for its reputation for leading local authorities in Germany on renewable energy and energy efficiency. My hon. Friend mentioned her local authority at the start of her speech. Does she believe that local authorities such as Islington, which is probably a similar size to Freiburg, as well as the Government, should take a lead, and revert to the principles of Agenda 21? They were laid down many years ago and some local authorities appear to have abandoned them.
Emily Thornberry: Yes. A Liberal Democrat Member launched my local authority’s new policies on the environment. From what I understand of the new policy, it appears to subsidise putting windmills on top of houses and other such high-profile matters. Such attention-grabbing behaviour does not, in the end, save the planet. There is no point in putting a windmill on top of a house if it is not insulated and the boiler has not been changed. One does not save the planet through the equivalent of buying a different sort of car. One has to do much more—and be much more fundamental—than that. I am greatly saddened by my local authority’s attitude to its so-called green initiatives because I believe that they constitute a certain frippery.
Chris Huhne: I am sorry that the hon. Lady has not taken the opportunity of welcoming her local council’s initiative, which is the first of its kind in the country to get the private sector in a borough to commit to greenhouse gas reductions. That is a worthwhile initiative and she runs the risk of appearing a little sour if she does not welcome it.
Emily Thornberry: Many private industries are interested in cutting their emissions and work with local government and national Government to do that. I assure the hon. Gentleman that Islington council did not think of that first.
It is important to cut the carbon emissions of our homes, and we have already done that. We started with Labour priorities through the decent homes programme, which, to many council tenants means new kitchens and bathrooms, but is much more than that. It is about ensuring that our social and affordable housing is up to decent homes standards. That means making sure that they are properly and fully insulated and energy-efficient. We have begun with social housing, so that those who are most vulnerable and in most need are literally insulated against the cold. When we came to power in 1997, only one in four homes in Islington were at decent homes standard, but by 2010, every single one will have reached that standard, thanks to a Labour Government. That is progressive politics in action and an achievement of which we should be immensely proud.
I also welcome the initiatives in the Budget to take the next step in our comprehensive action of ensuring that owner occupiers and private rented homes are brought up to the mark. The energy-efficient commitment will continue to force energy suppliers to improve energy efficiency in the homes that they serve. The Warm Front programme gives low income households grants of up to £4,000 to improve their energy efficiency. Pensioners who do not have central heating can receive a £300 discount when installing a new system. To tackle the biggest market failure of all—in the private rented sector—the Budget extends and expands the landlords energy savings allowance, which gives an allowance of up to £1,500 to landlords who invest in cavity wall and loft insulation. However, we could and should do more, although we are going in the right direction.
I also greatly welcome the kick start that the Budget gives to the Government’s goal to make all new builds zero carbon by 2016. The Budget has changed the stamp duty rules so that no stamp duty will be payable on the first sale of zero carbon homes of up to £500,000. Homes costing more than that will get a reduction of £15,000. I have a special interest in that aspect of financial incentives because, when I was a member of the Environmental Audit Committee, we made recommendations in our sustainable homes report of 21 March 2006.
Mr. Graham Stuart (Beverley and Holderness) (Con): Will the hon. Lady give way?
Emily Thornberry: Of course I shall give way to another member of the Environmental Audit Committee. I am sure that he can tell us more about the sustainable homes report.
Mr. Stuart: How many homes does the hon. Lady believe will benefit in the next year or two from the change that the Budget announced?
Emily Thornberry: The answer is many but not enough—we can always do more. Our ambition is clear and we are moving in the right direction. No British Government have previously introduced financial incentives to ensure that people insulate their homes. We are introducing those green incentives, in accordance with the recommendations of the Committee on which the hon. Gentleman served with me.
The Committee recommended that the Treasury consider reducing stamp duty for green homes. Exactly a year after the publication of the report, the 2007 Budget delivered the recommendation. Various groups that put pressure on the Environmental Audit Committee and gave evidence at its meetings should be acknowledged. They include WWF and its “One Million Sustainable Homes Campaign”, the Association for the Conservation of Energy, and the Energy Savings Trust. They have been working hard on the issue for many years and I hope that they will continue to work with us to ensure that we move forward.
The Government now need to build on their progress and develop a comprehensive set of fiscal incentives linked to the code for sustainable homes. The Budget will ensure that no home is left behind and that, by the end of the next decade, all existing and new homes will have the highest standard of energy efficiency. As we proved with social housing, that will not happen as result of market forces alone. We can achieve our goal only by stepping in as a Government commitment to working together. We cannot simply leave matters to the market. When Labour Members talk about housing, we know that it is a priority for our houses to be green, but that we also desperately need more of them and that they must be affordable.
We need more affordable housing for people such as Ms A, who came to my surgery recently asking for help. She is married with four children. She lives in a two-bedroom flat and has been on the waiting list for a transfer for several years. Her parents have died and she took on responsibility for her teenage sister, so there are seven people in a two-bedroom flat. Ms A’s oldest child is eight and autistic. Her second child is five, has severe language delay and may also be autistic. Her third child is three, has language and learning delay and behavioural problems. Her fourth child has asthma.
Ms A lives in fear that her three-year-old, who was rolling on the table moaning while Ms A was trying to talk to me at my surgery, may fall out of the window as she has no idea of danger, cannot communicate and climbs a lot. Ms A has back pain and cannot sleep at night because the eight-year-old and the three-year-old keep her awake. She is worried about her orphaned sister, who has to share her bedroom with her two nieces and has nowhere to study. Ms A suffers from depression—and no wonder. She urgently needs a four-bedroom home.
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