The Chairman: Does a member of the European Scrutiny Committee wish to make a brief explanatory statement?

Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): Thank you, Mr. Benton. It might be helpful to the Committee if I took a few minutes to explain the background to the document and the reasons why the European Scrutiny Committee recommended it for debate to this Committee.

Vehicle emissions are one of the principal sources of atmospheric pollution. Mandatory “Euro” emissions standards for various categories of vehicle have been in place in the European Community since 1970, and Euro V limits will apply to heavy duty vehicles from 1 October 2008. In December 2007, the Commission published this document, which proposes more stringent Euro VI limits that include significant reductions in diesel emissions of nitrogen oxides and particulate matter, a tightening of the emissions limit for ammonia, a large reduction in permitted emissions of hydrocarbons from diesel and measures for better control of emissions of the more dangerous smallest particles.

When the European Scrutiny Committee first considered the proposals on 6 February, the Government said that the proposals could make a useful contribution to achieving European and UK air quality targets, but it was also clear that they raised a large number of technical and other issues. As the Government said that they would consult on them before producing an impact assessment, we decided to report the document but defer taking a final view until we had received the assessment. The assessment was provided on 26 June and duly confirmed the document’s importance and potential costs. However, it also demonstrated a significant difference of view between the Commission and the UK about the extent to which the measures would lead to an increase in fuel consumption and hence, among other things, to an increase in emissions of carbon dioxide.

The first issue is the relative balance of benefit between the likely reduction of pollutants and the projected increase in carbon dioxide emissions due to increased fuel consumption. Although reducing pollutants from vehicles may bring health benefits, it seems counter-productive to achieve that by increasing carbon dioxide emissions. Given the importance of reducing carbon dioxide emissions from transport in order to meet our climate change targets, it would seem crazy to introduce measures at this point that would have the opposite effect. It would seem crazy to the hard-pressed car driver being exhorted to buy more economical and reduced carbon dioxide-emitting cars, and it would fly in the face of vehicle excise duty, the proposed fiscal measure designed to promote the purchase of low carbon dioxide-emitting cars.

The second problem is the suspect nature of the statistics on which the proposals are based. In its cost-benefit analysis, the Commission arrived at a totally different conclusion from the Government’s. The Government’s view is that the fuel penalty consumption arising from the introduction of the measures could be as high as 8 per cent. On the other hand, the Commission estimates it to be as low as 2 to 3 per cent. The Commission proposals are predicated on the assumption that technological advances will reduce fuel consumption in future. Although that is quite possible, it seems to be a highly speculative basis on which to construct—

The Chairman: Order. I am sorry to interrupt the hon. Gentleman, but the opening statement should be confined to five minutes. Perhaps I should have pointed that out to him originally, but that is what the Standing Order says, so I ask him to observe it and to conclude in a few sentences.

Mr. Bailey: Thank you, Mr. Benton—I shall certainly conclude my speech. The two main points that justify the presentation of this document to the Committee have been made. I hope that the Government will reconsider the measure in the light of the points I have made in my speech.

The Chairman: I call the Minister to make an opening statement.

The Parliamentary Under-Secretary of State for Transport (Jim Fitzpatrick): It is a pleasure to see you presiding over the Committee this afternoon, Mr. Benton. I am grateful to my hon. Friend the Member for West Bromwich, West for his words of explanation on behalf of his Committee. The primary purpose of the proposal is to improve air quality by reducing emissions of particulate matter and oxides of nitrogen—NOx—together with the other controlled pollutants from lorries, buses and other heavy duty vehicles.

The Committee needs to consider whether the benefits of the proposal, which the Government broadly support, justify the likely costs. As the European Scrutiny Committee has indicated, the proposals are far-reaching and significant in environmental and economic terms. I shall outline briefly the background to the proposal and will then be happy to discuss its contents and the Government’s impact assessment.

As hon. Members will be aware, the proposal represents the sixth in a succession of increasingly stringent EU emission standards for heavy duty vehicles. Despite traffic growth, the standards—commonly referred to as “Euro standards”—have significantly reduced pollution from vehicles during the past decade. Air quality projections carried out as part of our impact assessment on the proposal show, however, that we will not meet our air quality objectives—especially in our towns and cities—through existing measures alone and that even the improvements that this measure will bring will not completely solve the problem.

Air quality objectives are set to safeguard and improve public health. They include legally binding EU limit values for concentrations of nitrogen dioxide and particulate matter. Road transport is a significant contributor to exceedences of those objectives and diesel-powered vehicles are responsible for most of the particulates. Many other member states are having similar difficulties to those that we are experiencing in meeting their air quality objectives. The possibility none the less exists that the European Commission might feel justified in instituting infraction proceedings against those who fail to meet their obligations in this area.

For the 100 years following their introduction, the public health benefits of the emission limits in the Euro VI proposals have been monetised for the purpose of our impact assessment. However, according to our estimates, that amounts to a saving of between one quarter and half a million life years that would otherwise be lost to the UK population.

The proposed emission limits represent a reduction of 80 per cent. in the generic oxides of nitrogen, which form nitrogen dioxide in the atmosphere, and a 67 per cent. reduction in particulate matter in comparison with the Euro V standards that they will replace. The proposed emission limits are stringent, but have been welcomed by energy manufacturers because they broadly align EU and United States environmental protection agency limits, so that manufacturers will be able to sell a common product in both the European and north American markets.

The European Commission’s proposal includes a number of elements in addition to the setting of new emission limits. Of those additional elements, the most significant are those that would extend the so-called access to repair information provisions that currently apply in the light duty vehicle sector to heavy duty vehicles, and the commitment to the eventual introduction of a particle number limit.

The access to repair information provisions are designed to ensure that the information that manufacturers make available to their franchised dealers is also made available on equal terms to the independent repair sector. That requirement is important in an age when the diagnosis and repair of faults on vehicles is increasingly likely to require access to an on-board computerised fault recording and control system. However, a significant proportion of heavy duty vehicles are built in a multi-stage process, and the final vehicle manufacturers may be relatively small firms. It does not seem reasonable to place the burden of supplying repair information for the whole vehicle on such firms, when they may have bought in the engine, brakes, gearbox and such like from larger organisations. The Government would prefer the access to repair provisions in the regulation to be limited to engine manufacturers having to provide information on engine and pollution control systems.

The commitment to the introduction of a particle number limit as a supplement to the particulate mass limit, which has been a feature of all the Euro standards to date, represents a recognition that the mass limit is approaching a level at which reliable measurement is difficult, and that an additional technique is required to control emissions of the ultra-fine particles that are most strongly implicated in the health problems associated with exposure to airborne particulate. The proposed emission limits can be achieved using existing technologies. That has permitted us, through our expert contractors and their contacts in the industry, to make good estimates of the technology costs associated with the limits, and it has also encouraged some member states to press for the standard’s implementation earlier than we believe would be either feasible or wise.

Earlier implementation than that which the European Commission has proposed carries with it the real risk that many of the implementing measures’ technical details would not be in place. The standard would become, at best, a two-stage standard, and in addition, manufacturers would not have sufficient time to address the fuel consumption and associated carbon dioxide penalty that we have estimated and the Scrutiny Committee has remarked upon.

The assumed fuel consumption penalty in our impact assessment modelling represents the worst case. The 8 per cent. penalty that is used is based on independent expert advice, and the European Commission has produced a substantially lower estimate of 3 per cent. However, the reality is not as bleak as the impact assessment figures would suggest. The reported fuel consumption of heavy duty vehicles has shown a downward trend over recent years, and we expect it to continue. It is likely to offset substantially the fuel consumption penalty by the date of the implementation of Euro VI, provided that the European Commission proposes that date. That expectation is supported by the fact that some heavy duty engine manufacturers have expressed publicly the view that they will be able to meet either the near-equivalent United States 2010 standard or the proposed Euro VI standard without an eventual fuel consumption penalty. The impact assessment shows that, even if the fuel consumption penalty were still as high as 3 per cent. by the time of implementation, the costs of Euro VI would be within the range of benefits.

Euro VI is an essential element in the achievement of our air quality objectives, as the modelling that was undertaken for the UK’s air quality strategy shows. Therefore, we are satisfied that, on costs and benefits, the Commission proposal will be proportionate. The proposal is supported by manufacturers, yet it is challenging enough to make a real contribution to our air quality objectives.

The Chairman: We now have until 5.30 pm for questions to the Minister. I remind Members that they should be brief. It is open to a Member, subject to my discretion, to ask a series of related questions, one after the other. In doing so, however, Members will, I hope, bear in mind the interests of other Members who may also wish to pursue a sustained line of questioning.

Stephen Hammond (Wimbledon) (Con): I should like to start by asking the Minister about his statement that the European Scrutiny Committee had rightly suggested that, on the environment and on cost, the measure was far-reaching. What advice did Ricardo consulting engineers offer the Government on the cost of fitting cleaner engines and exhaust systems? What might that cost be per vehicle? We have talked extensively about the fuel consumption penalty and the work being done by the Government suggesting an 8 per cent. penalty. Will the Minister publish—

The Chairman: Order. I am sorry for interrupting the hon. Gentleman, but questions must be asked one at a time. If hon. Members wish to ask a series of linked questions, it is only fair to allow the Minister to respond individually, after which hon. Members may ask further questions. I hope that that is clear.

Stephen Hammond: In that case, my first question is about the cost.

Jim Fitzpatrick: I am grateful for your protection, Mr. Benton, but I would have had more thinking time had the hon. Gentleman had the chance to ask a series of questions, which might have allowed me to follow his line of thinking.

The hon. Gentleman asked about whether our consultants have advised us on the costs per vehicle. My understanding is that the average annual additional vehicle cost of the measure is estimated to be £3,833 per articulated vehicle and £2,100 per rigid vehicle, and there is an expected increase in maintenance costs of £140 per vehicle per annum thereafter.