17 Jun 2015 : Column 421
6.30 pm
Alan Mak (Havant) (Con): I congratulate the hon. Member for Sheffield, Brightside and Hillsborough (Harry Harpham) and my hon. Friend the Member for Hertsmere (Oliver Dowden) on their wonderful maiden speeches. I am grateful for this opportunity to speak in today’s debate on productivity.
The central issue is how we as a Government can help our people to fulfil their potential and how we can unleash Britain’s core strengths as a nation through hard work, aspiration and creativity. That is what productivity means in reality. It involves a commitment to helping hard-working people to get on in life, and that is what this Government have been doing.
Opposition Members are right to say that productivity is key to living standards and our public finances, but they are wrong to suggest that all is doom and gloom. Productivity rose last year after plummeting during Labour’s recession, which caused the biggest fall in living standards for a generation. That recession meant banks not lending to our businesses and it led to our biggest drop in productivity since 1974. Incidentally, that was when a previous Labour Government gave us the three-day week. This Government have been clearing up that mess. To coin a phrase, we are the Government who have been fixing the roof while the sun has been shining.
Mr David Anderson (Blaydon) (Lab): Will the hon. Gentleman give way?
Alan Mak: I want to make some progress.
Over the past five years, and now in government alone, we have taken action in three areas that all hon. Members should welcome. First, we have been rebalancing the economy geographically so that wealth, opportunity and productivity are spread more evenly across the country. In 2013, London enjoyed 29% higher productivity than the UK average. We are supporting other regions to get ahead and stay ahead, which is why the Chancellor has launched the northern powerhouse to connect up our great cities in the north. Its population of 15 million, its great industrial and manufacturing heritage and its strong reputation for science and technology provide a big foundation for the northern powerhouse to be built on.
Foreign investors also have confidence in the northern powerhouse concept. We have seen massive investments all over the north, with Hitachi, Nissan and Rolls-Royce in the north-east, Siemens in Hull and East Yorkshire, the airport city in Manchester, and the new deep-water port in Liverpool. These are the strong foundations on which the northern powerhouse is being built.
Secondly, we are rebalancing the economy by sector, supporting manufacturing, science and technology rather than just relying on financial services. We must, of course, champion our financial services sector across the entire UK—it is a world leader and a big source of tax revenue—but as we saw during the last Labour Government, we need a more broad-based economy with high-quality manufacturing, technology and science at its heart. That is why this Government have created the Catapult centres, a network of world-leading centres designed to transform the UK’s innovation and productivity in seven areas, including manufacturing and cell therapy.
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Thirdly, we are cutting red tape for businesses and reducing the burdens on hard-working people. In my constituency of Havant, for example, manufacturing and engineering businesses such as Colt, Eaton Aerospace and Pfizer are benefiting from the most competitive rate of corporation tax in the G7, allowing them to train apprentices, to export, to innovate and to boost productivity. Through the red tape challenge, we have removed or amended more than 3,000 regulations. We have also cut taxes for hard-working people, allowing them to keep more of the money they earn, which is the best possible way of boosting productivity.
I also commend the Government for appointing the noble Lord O’Neill of Gatley as the new Commercial Secretary to the Treasury. I heartily recommend that Members read his maiden speech, which focuses on productivity. I have engaged with his lordship on a number of initiatives in the City to bring to this country best practice from fast-growing economies such as China, and I know that he will bring a huge amount of experience to the debate. This Government are committed to our economic recovery, with a long-term economic plan that has already ensured that Britain has the fastest growing economy in the western world. I look forward to the publication of the Government’s productivity plan, which will set out further steps to strengthen our economy and boost productivity in the years to come.
6.34 pm
Suella Fernandes (Fareham) (Con): Improving our country’s productivity is the key to raising standards for everyone, and our future prospects depend on it. Although I welcome this debate on productivity, I must say that the context of the productivity puzzle cannot be ignored. There is no doubt that the past five years have seen record levels of employment, with 2 million more people in work. In my constituency, local employers such as Lucketts Travel and Eaton Aerospace are contributing to the local economy through more jobs, more apprentices and increases in wage rates. Pay is now rising at its fastest rate since the economic crisis. But we need to be measured in our analysis, and I echo the comments made by my right hon. Friend the Member for Wokingham (John Redwood) in his analysis of the causes of the productivity puzzle. It is no coincidence that the productivity collapse happened at about the same time as the financial crash, leading to a sudden shrinkage in the financial sector. The decline in North sea oil output in recent years is another contributory factor to the fall in productivity.
That is the context to our productivity challenge. The solution is at the heart of this Government’s agenda. First, our massive investment in infrastructure will hugely contribute to productivity. On that, we may be talking about the £1.4 billion package of 18 new road schemes in south-east England, improving the A27 corridor, which runs through my constituency, and working on junction 10 of the M27. We are witnessing the boldest and most far-reaching roads programme for decades, which will unlock economic potential in the region. We may be talking about the £7 million Government investment in the Solent enterprise zone, just over the border in the neighbouring constituency of my hon. Friend the Member for Gosport (Caroline Dinenage), whom I congratulate on her efforts to get more investment from Government. The centre of excellence in engineering and manufacturing
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advanced skills training—CEMAST—opened there last year, and hundreds more young people will be trained in technical and vocational skills.
We could also mention the reform to our tax regimes—to corporation tax, the jobs tax and to business rates. Hundreds of thousands of small businesses can now operate more efficiently. This investment, this package of reforms and the tax changes put enterprise, jobs and aspiration at the heart of our work in government, so that productivity will increase and brand Britain will continue to thrive.
6.37 pm
Robert Jenrick (Newark) (Con): I, too, congratulate the new Members on their excellent maiden speeches. May I also welcome my Nottinghamshire neighbour, the hon. Member for Nottingham East (Chris Leslie), to his role as shadow Chancellor? He is the third Nottingham man in recent times to hold the position, although of course only my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) ever got the top job. I am sure that if the hon. Gentleman needs any friendly advice on how to run a successful economy, my right hon. and learned Friend would be happy to give it.
The fact that productivity continues to grow in prominence is, as has been said throughout the debate, a recognition of the remarkable achievements in employment during the past few years—almost 9,000 new jobs have been created since 2010 in my constituency—and the fact that we now have a credible, long-term plan for the public finances, respected by the markets. We need to continue to deliver on it. It is also an acceptance by all of us that the country is running up against the limits of what can be achieved by boosting employment alone. We are well on the way to becoming a country of people in work, but the task for the next five years is addressing how we can become a country of people who are well paid.
So much has been said already, but let me address one area in particular. The truth is that the UK has never quite managed to develop an entrepreneurial culture equivalent to that in the United States. Governments do not create entrepreneurs or the businessmen and women of the future, but they can and must be the flagbearers for them. Margaret Thatcher was, undoubtedly, the outstanding champion of British enterprise of the past 30 years. We need to re-awaken the spirit of those times, albeit in contemporary language, and I am certain that the Treasury Front-Bench team will do so.
A few days ago, I had the great pleasure of going to the excellent Palace theatre in Newark to watch the play “Arcadia”, and a line in it stuck with me. It was when one character turns to another and says, “This is the greatest time to be alive, because everything we thought we knew is wrong”. We should all remember that line. With the internet upending old industries; and with the shift in power from the west to the east; new opportunities are out there, if only we and our generation can seize them with a new, spirited, entrepreneurial culture.
How might we do that? We could pivot towards the growth of those emerging markets, and away from the stagnant economies, mostly in Europe. That means new free trade agreements with China; avoiding the caricature of the Transatlantic Trade and Investment Partnership; using the Foreign and Commonwealth Office and the
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Commonwealth network, as we did in the previous Parliament; and not complaining, as some on the Opposition Benches do, of mercantilism in the FCO as if trade were a dirty word.
The UK should become a hub of the IT sector in Europe. It has the best universities and it has the venture capital industry; we just need the ambition to realise it. We should use our universities. The Catapult initiative that we have heard of already has been and will continue to be excellent. We should have the confidence to allow enterprise to have its rewards. Genuine wealth creators should be able to reap the benefits of their success and not be ashamed of it.
We need to be on the side of the insurgent, and not the vested interest. We need to tackle the big six and to break up BT Openreach. Generations of Treasury Ministers have had “supply side” written on their political gravestones. I am sure that the Chancellor and the Chief Secretary to the Treasury will be remembered as the entrepreneurs’ champions. There is no better epithet. We need to inspire a generation to succeed, prosper and excel, as all Conservative Governments have done in the past.
Mr Speaker: Order. As the House will know, the ballot for electing Chairs of Select Committees closed at 5pm. Counting has been under way since then. I had hoped that it might be possible to declare the results to the House at 7.15 pm this evening—in contrast to the arrangement five years ago—before the Adjournment. Sadly, I have to tell the House that that will not be possible. I therefore intend to announce the results after questions tomorrow morning at around 10.30 am. I am advised—and I am glad—that there will be no prior publication.
6.41 pm
Shabana Mahmood (Birmingham, Ladywood) (Lab): It is a pleasure to close this debate on behalf of the Opposition and to support our motion. We have had a good debate with some thoughtful speeches. I particularly want to mention the speeches of my hon. Friends the Members for Hartlepool (Mr Wright), for Newcastle upon Tyne Central (Chi Onwurah), for Croydon North (Mr Reed), for Sefton Central (Bill Esterson) and for Bristol West (Thangam Debbonaire). May I also congratulate the hon. Members who made their maiden speeches today? I am talking about the hon. Member for Hertsmere (Oliver Dowden)—or indeed for Albert Square—and my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Harry Harpham), who made a moving tribute to his predecessor, David Blunkett, and to his constituency. May I welcome them both to this House, and I wish them well as they use the power of their voices to speak on behalf of their constituents and pursue the causes that matter to them?
One such cause and central issue of the day, on which I hope there is consensus in the House, is productivity and the impact of productivity on the performance of our economy. Productivity is the central economic challenge facing the Government and I believe that getting it right is vital if we are to achieve higher living standards, sustained GDP growth and effective deficit reduction.
We must seek to maximise output from the efforts of working people. If workers can produce more, their employers can pay more, tax revenues can be more
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buoyant, and GDP growth stronger and more sustainable. In short, if we get this right, everyone is a winner. Governments can make choices to pull the levers at their disposal when it comes to the national minimum wage or indeed the living wage, but when it comes to wider wage growth across the rest of the economy and for those on middle incomes, higher productivity is the way forward, as the CBI and indeed the Bank of England have also emphasised.
We should all agree in this House that GDP growth that is driven just by increasing the number of people in work and how many hours they work will not make people better off. As a nation, rather than settling for the current state of things, we should aspire to have more for us all, to be better and to be stronger. We should have a broader vision and ambition for everyone in our country, especially those who are currently stuck in low-paid work.
What has been happening to productivity on this Government’s watch? Seven years on from the global financial crisis—some Tories appear to have forgotten that there was a global financial crisis before Labour left power—productivity is still 1.7% below the pre-crisis peak. Between 2010 and 2014, productivity has grown by an average of just 0.4% a year. In quarter 4 of 2014, productivity growth fell by 0.2% compared with the previous quarter, and productivity growth was also negative in 2013 and 2012, at minus 0.3% and minus 1.2% respectively. UK output per hour is now 17 percentage points below the G7 average and 31 percentage points below that of the United States of America.
The Office for Budget Responsibility says that productivity growth is the
“most important and uncertain part”
of its economic forecast. The Office for National Statistics says that the stagnation of productivity is “unprecedented”. The Bank of England says that this is one of its main concerns about the nature of the recovery going forward.
One response to this productivity puzzle would be to think that this is just how things are—that this is a necessary and inevitable consequence of a changing world—but it does not have to be this way, and we should not settle for things being this way. Despite the post-election pronouncements about a soon-to-be-announced so-called productivity plan, the Tories’ inaction and ineffectiveness on this issue over their previous five years in government suggests that they have been content to settle for things exactly as they are. How else can the Chancellor explain his complete failure even to mention productivity during his March Budget speech, or his failure to prioritise productivity growth over the previous five years? But he and his team can listen today and start to put things right as they look ahead to the July Budget. The Chancellor has choices to make ahead of the first fiscal event of this Parliament, and he should make choices that will boost productivity.
The Chancellor could focus on skills and innovation. We have heard today that jobs growth has been disproportionately focused on lower-skilled work since mid-2013, and we have a persistent trend of insecurity in the labour market and, inevitably, weak wage growth too. The Government are wrong to sit back and watch
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that happen, because our labour market is changing and the jobs of tomorrow will look very different from the jobs of 20 years ago. Our future workforce is also changing; it is ageing, there are more women and there are increasing numbers of people with high-level qualifications. The Opposition believe that, with so much talent to harness, public spending should focus on enhancing investment, skills and innovation. The Tories have failed thus far to provide any real solutions or strategies to build the productive, high-skilled, high-wage workforce that this country needs, and this must urgently change.
On infrastructure, frankly Labour has already done the heavy lifting with the report that we commissioned from Sir John Armitt, whose proposal, accepted in full by us, for a national infrastructure commission is one that the current Government should also adopt. Indeed, we have even prepared the draft legislation. With all the work done, and given that it is in the national interest, Ministers can have that one for free and they should go ahead and do it.
The Chancellor should also listen to us and allow the OBR to publish an assessment of how the likely options for the spending review due later this year would impact on productivity. I know that we have asked him several times to allow the OBR to do a number of things, such as auditing party general election manifestos or preparing reports to inform the EU referendum debate. Unfortunately, the Chancellor has never taken the opportunity to listen to us before. However, it is important that we have a wider understanding of the big and difficult choices that will be made on public spending, and frankly, he should not run away or hide from having some light shed on the consequences of the different choices open to him, or indeed the scrutiny that will come once he has made his choices.
With no clear plan to boost productivity over the past five years, no significant drive for the skills that are needed for good high-wage jobs, no national infrastructure commission and no long-term funding framework for science, and only now plans for a plan in July, the Chancellor is coming late to this particular party. But if he is going to show up—and today’s no-show does not inspire confidence—he needs to make it count. His party colleagues could help him on his way by voting for our motion.
6.49 pm
The Exchequer Secretary to the Treasury (Damian Hinds): Solving the productivity puzzle is a vital component of the journey we have been on since 2010—the journey to long-term prosperity through a comprehensive long-term economic plan. In 2010 this country urgently needed financial stability. We provided it. We needed to get public spending under control. We did so. We needed job creation, because that is the best way to help people support their families, and 2 million jobs were created—1,000 a day.
Rebuilding an economy takes time. It is a long journey, and we have always known that improving productivity is a key part of that journey. Our productivity plan, which the Chancellor announced last month, will set out how we develop that further. Forty-five years ago, when I was born, UK output per hour was 37% below that of the United States, a significantly bigger gap than
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there is today. What happened 45 years ago is of limited significance and, I suspect, interest to anybody sitting here right now, but it highlights the partial picture presented by the words of the motion, that UK productivity has been an issue “for several years”. It has been an issue for several decades.
Ever since we returned to government in 2010, productivity growth has been central to our mission of sustainably rebuilding the economy. In 2010 our overarching priority had to be keeping people in jobs while we set about the task of returning to fiscal balance. I make no apology for that. At the same time as pulling us back from the financial brink, we were also bringing in key supply-side reforms to boost efficiency and productivity. We created a national infrastructure plan and, as a result, infrastructure investment was 15% higher in the previous Parliament than in the preceding one. On road, on rail and online, thousands of infrastructure projects are connecting people and communities.
Our support for science and innovation has increased our competitive advantage by focusing on the UK’s great areas of strength. Even as we had to trim departmental budgets across the board, we protected science. We helped our universities to get on a firm financial footing to maintain their world-class position as centres of excellence. To rebalance the economy we put together a radical programme for growth outside London and the south-east, combining investment and devolution.
All this has helped to deliver jobs and growth. Last year we saw productivity begin to rise. The Office for Budget Responsibility expects productivity growth of 0.9% this year, and after that it grows at 2% or above in every year of the forecast period. We are now ready for the next step. Our productivity plan, as the Chancellor announced on 20 May, will explain how we shift our economy up a gear. It will be ambitious, long term and wide-ranging. Our manifesto is a programme for long-term sustainable growth: £100 billion of infrastructure this Parliament, as well as the big infrastructure questions for the decades ahead; skills for the long term, at every stage of people’s education and career; a better balanced Britain, and not just a northern powerhouse because, as I am sure Members will agree, there should be no monopoly on powerhouses.
We will deliver the affordable homes that people need. We will cut red tape, help businesses to access finance, and maximise workforce participation, including giving parents who want to return to work the support to do so—this, and much, much more, is a blueprint for a more productive Britain.
Today we have had interesting and powerful speeches from a number of right hon. and hon. Members, many drawing on their own business experience. Two speeches that we heard, which were maiden speeches, were particularly outstanding. The first was that of my hon. Friend the Member for Hertsmere (Oliver Dowden)—as expected, a highly erudite maiden speech from the former deputy chief of staff to the Prime Minister. He reminded us of the rich lineage he has in his constituency predecessors. I am sure he will make an extremely admirable addition to that line. The second was that of the hon. Member for Sheffield, Brightside and Hillsborough (Harry Harpham). He, too, knows what it is to have big shoes to step into—those of David Blunkett, who is so respected right across the House. The hon. Gentleman follows in his footsteps from local government into this
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place. He put EU renegotiation in a very interesting, long historical context. As for the topic of today’s debate, he rightly put productivity in its proper context—that of raising living standards and spreading prosperity.
There were a number of other interesting speeches. My right hon. Friend the Member for Wokingham (John Redwood) reminded us of the sectoral shift that has been going on. He spoke about the maturity of the UK continental shelf and the fall of the oil price, and what that has done to the North sea oil sector, as well as the shift away from financial services. My hon. Friend the Member for Bexhill and Battle (Huw Merriman) reminded us of his own lack of productivity when he challenged Madam Deputy Speaker electorally in North East Derbyshire. He also described the contrast between this country and France, and how we should be careful who we follow.
My hon. Friend the Member for Yeovil (Marcus Fysh) talked about the importance of services as well as manufacturing in productivity growth. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) spoke of the importance of cutting red tape. My hon. Friend the Member for Solihull (Julian Knight) welcomed employer involvement with schools in building skills, and my hon. Friend the Member for Croydon South (Chris Philp) talked about all the things that Labour did not choose to debate today, which are just as instructive as the things that they chose. There were excellent speeches from my near neighbours, my hon. Friends the Members for Havant (Alan Mak) and for Fareham (Suella Fernandes), and from my hon. Friend the Member for Newark (Robert Jenrick).
I want to mention the contributions of two Opposition Members in particular. The hon. Member for Hartlepool (Mr Wright) talked about the success stories of the automotive and aerospace sectors, and the importance of research and development spending. He asked about the Government’s industrial strategy. Our entire programme of government is an industrial strategy. It is integrated with what we do, not something that we add on. Of course, we stay in constant contact with industry.
The hon. Member for Sefton Central (Bill Esterson) spoke of his own experience in training and development, and the key role that management quality plays in productivity. He is quite right, and I remind him that our postgraduate loans will be available to MBA students as well. More broadly in terms of skills-building, we have an ambitious programme to deliver 3 million quality apprenticeships. To date, there are 50 higher apprenticeships available up to degree and masters level. Last year, there was a 40% increase in the number of people participating in higher apprenticeships.
Steve Rotheram (Liverpool, Walton) (Lab): Will the Minister confirm how many of those 3 million quality apprenticeships will be conversions from other programmes?
Damian Hinds: We have a track record in the previous Parliament of delivering 2.2 million quality apprenticeships. We will carry on delivering that important investment in the young people of this country and in our industrial future.
The reforms of the past five years have delivered jobs, growth and security for the people of our country. We now have a chance to take things to the next level through our bold and ambitious productivity plan.
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We have a track record of making the right economic decisions—a record that, I am glad to say, the British people strongly endorsed five weeks ago. There is a real ambition to achieve the step change in productivity that our country needs. Our cities want it, our businesses want it and the people of this country want it. With them, we will make it happen.
The House divided:
Ayes 260, Noes 320.
Division No. 18]
[
6.58 pm
AYES
Abrahams, Debbie
Ahmed-Sheikh, Ms Tasmina
Alexander, Heidi
Ali, Rushanara
Allen, Mr Graham
Anderson, Mr David
Arkless, Richard
Ashworth, Jonathan
Austin, Ian
Bailey, Mr Adrian
Bardell, Hannah
Barron, rh Kevin
Beckett, rh Margaret
Benn, rh Hilary
Betts, Mr Clive
Black, Ms Mhairi
Blackford, Ian
Blackman, Kirsty
Blackman-Woods, Dr Roberta
Blenkinsop, Tom
Blomfield, Paul
Boswell, Philip
Bradshaw, rh Mr Ben
Brennan, Kevin
Brock, Deidre
Brown, Alan
Brown, Lyn
Brown, rh Mr Nicholas
Buck, Ms Karen
Burden, Richard
Burgon, Richard
Butler, Dawn
Byrne, rh Liam
Cadbury, Ruth
Cameron, Dr Lisa
Campbell, rh Mr Alan
Campbell, Mr Ronnie
Champion, Sarah
Chapman, Douglas
Cherry, Joanna
Clwyd, rh Ann
Coffey, Ann
Cooper, Julie
Cooper, Rosie
Cowan, Ronnie
Cox, Jo
Coyle, Neil
Crausby, Mr David
Crawley, Angela
Creagh, Mary
Creasy, Stella
Cruddas, Jon
Cryer, John
Cummins, Judith
Cunningham, Alex
Cunningham, Mr Jim
Danczuk, Simon
David, Wayne
Davies, Geraint
Day, Martyn
De Piero, Gloria
Debbonaire, Thangam
Docherty, Martin John
Donaldson, Stuart Blair
Doughty, Stephen
Dowd, Jim
Dowd, Peter
Dugher, Michael
Durkan, Mark
Eagle, Ms Angela
Eagle, Maria
Edwards, Jonathan
Efford, Clive
Elliott, Tom
Esterson, Bill
Evans, Chris
Fellows, Marion
Ferrier, Margaret
Field, rh Frank
Fitzpatrick, Jim
Flello, Robert
Fletcher, Colleen
Flint, rh Caroline
Flynn, Paul
Fovargue, Yvonne
Foxcroft, Vicky
Gapes, Mike
Gardiner, Barry
Gethins, Stephen
Gibson, Patricia
Glass, Pat
Glindon, Mary
Godsiff, Mr Roger
Goodman, Helen
Grady, Patrick
Grant, Peter
Gray, Neil
Green, Kate
Greenwood, Lilian
Greenwood, Margaret
Griffith, Nia
Gwynne, Andrew
Haigh, Louise
Hamilton, Fabian
Hanson, rh Mr David
Harman, rh Ms Harriet
Harpham, Harry
Harris, Carolyn
Hayes, Helen
Hayman, Sue
Healey, rh John
Hendrick, Mr Mark
Hendry, Drew
Hepburn, Mr Stephen
Hillier, Meg
Hodgson, Mrs Sharon
Hoey, Kate
Hopkins, Kelvin
Hosie, Stewart
Howarth, rh Mr George
Hunt, Tristram
Huq, Dr Rupa
Hussain, Imran
Irranca-Davies, Huw
Jarvis, Dan
Jones, Gerald
Jones, Graham
Jones, Helen
Jones, Mr Kevan
Kane, Mike
Kaufman, rh Sir Gerald
Keeley, Barbara
Kerevan, George
Kerr, Calum
Kyle, Peter
Lavery, Ian
Law, Chris
Leslie, Chris
Lewell-Buck, Mrs Emma
Lewis, Clive
Lewis, Mr Ivan
Long Bailey, Rebecca
Lucas, Caroline
Lucas, Ian C.
Lynch, Holly
MacNeil, Mr Angus Brendan
Mactaggart, rh Fiona
Madders, Justin
Mahmood, Shabana
Malhotra, Seema
Mann, John
Marris, Rob
Marsden, Mr Gordon
Maskell, Rachael
Matheson, Christian
Mc Nally, John
McCabe, Steve
McCaig, Callum
McCarthy, Kerry
McDonald, Andy
McDonald, Stewart
McDonald, Stuart C.
McDonnell, John
McFadden, rh Mr Pat
McGarry, Natalie
McGinn, Conor
McInnes, Liz
McLaughlin, Anne
Meacher, rh Mr Michael
Meale, Sir Alan
Mearns, Ian
Miliband, rh Edward
Monaghan, Carol
Monaghan, Dr Paul
Moon, Mrs Madeleine
Morden, Jessica
Morris, Grahame M.
Mullin, Roger
Murray, Ian
Nicolson, John
O'Hara, Brendan
Onn, Melanie
Onwurah, Chi
Osamor, Kate
Oswald, Kirsten
Owen, Albert
Paterson, Steven
Pearce, Teresa
Pennycook, Matthew
Phillips, Jess
Phillipson, Bridget
Pound, Stephen
Powell, Lucy
Qureshi, Yasmin
Rayner, Angela
Reed, Mr Jamie
Reed, Mr Steve
Rees, Christina
Reynolds, Emma
Reynolds, Jonathan
Rimmer, Marie
Ritchie, Ms Margaret
Robertson, Angus
Robinson, Mr Geoffrey
Rotheram, Steve
Ryan, rh Joan
Saville Roberts, Liz
Shah, Naz
Sharma, Mr Virendra
Sheerman, Mr Barry
Sheppard, Tommy
Sherriff, Paula
Shuker, Mr Gavin
Siddiq, Tulip
Skinner, Mr Dennis
Slaughter, Andy
Smeeth, Ruth
Smith, rh Mr Andrew
Smith, Angela
Smith, Cat
Smith, Jeff
Smith, Nick
Smyth, Karin
Spellar, rh Mr John
Starmer, Keir
Stephens, Chris
Stevens, Jo
Stringer, Graham
Stuart, Ms Gisela
Tami, Mark
Thewliss, Alison
Thomas, Mr Gareth
Thomas-Symonds, Nick
Thompson, Owen
Thomson, Michelle
Thornberry, Emily
Timms, rh Stephen
Trickett, Jon
Turner, Karl
Twigg, Derek
Twigg, Stephen
Umunna, Mr Chuka
Vaz, rh Keith
Vaz, Valerie
Watson, Mr Tom
Weir, Mike
West, Catherine
Whiteford, Dr Eilidh
Whitehead, Dr Alan
Whitford, Dr Philippa
Williams, Hywel
Wilson, Corri
Wilson, Phil
Wilson, Sammy
Winnick, Mr David
Winterton, rh Ms Rosie
Wishart, Pete
Woodcock, John
Wright, Mr Iain
Zeichner, Daniel
Tellers for the Ayes:
Nic Dakin
and
Susan Elan Jones
NOES
Adams, Nigel
Afriyie, Adam
Aldous, Peter
Allan, Lucy
Allen, Heidi
Amess, Sir David
Andrew, Stuart
Ansell, Caroline
Argar, Edward
Atkins, Victoria
Bacon, Mr Richard
Baker, Mr Steve
Baldwin, Harriett
Barclay, Stephen
Baron, Mr John
Barwell, Gavin
Bebb, Guto
Bellingham, Mr Henry
Benyon, Richard
Beresford, Sir Paul
Berry, Jake
Berry, James
Bingham, Andrew
Blackman, Bob
Blackwood, Nicola
Blunt, Crispin
Boles, Nick
Bone, Mr Peter
Borwick, Victoria
Bottomley, Sir Peter
Bradley, Karen
Brady, Mr Graham
Brazier, Mr Julian
Bridgen, Andrew
Brine, Steve
Brokenshire, rh James
Bruce, Fiona
Buckland, Robert
Burns, Conor
Burns, rh Sir Simon
Burrowes, Mr David
Burt, rh Alistair
Cairns, Alun
Campbell, Mr Gregory
Carmichael, Neil
Cartlidge, James
Caulfield, Maria
Chalk, Alex
Chishti, Rehman
Chope, Mr Christopher
Churchill, Jo
Clark, rh Greg
Cleverly, James
Clifton-Brown, Geoffrey
Coffey, Dr Thérèse
Collins, Damian
Colvile, Oliver
Costa, Alberto
Cox, Mr Geoffrey
Crabb, rh Stephen
Crouch, Tracey
Davies, Byron
Davies, Chris
Davies, David T. C.
Davies, Glyn
Davies, James
Davies, Mims
Davies, Philip
Davis, rh Mr David
Dinenage, Caroline
Djanogly, Mr Jonathan
Dodds, rh Mr Nigel
Donaldson, rh Mr Jeffrey M.
Donelan, Michelle
Dorries, Nadine
Double, Steve
Dowden, Oliver
Drax, Richard
Drummond, Mrs Flick
Duncan, rh Sir Alan
Duncan Smith, rh Mr Iain
Dunne, Mr Philip
Ellis, Michael
Ellison, Jane
Ellwood, Mr Tobias
Elphicke, Charlie
Eustice, George
Evans, Graham
Evans, Mr Nigel
Evennett, rh Mr David
Fabricant, Michael
Fernandes, Suella
Field, rh Mark
Foster, Kevin
Fox, rh Dr Liam
Francois, rh Mr Mark
Frazer, Lucy
Freeman, George
Freer, Mike
Fuller, Richard
Fysh, Marcus
Gale, Sir Roger
Garnier, Mark
Gauke, Mr David
Ghani, Nusrat
Gibb, Mr Nick
Gillan, rh Mrs Cheryl
Glen, John
Goldsmith, Zac
Goodwill, Mr Robert
Gove, rh Michael
Graham, Richard
Grant, Mrs Helen
Gray, Mr James
Grayling, rh Chris
Green, Chris
Green, rh Damian
Greening, rh Justine
Grieve, rh Mr Dominic
Griffiths, Andrew
Gummer, Ben
Gyimah, Mr Sam
Halfon, rh Robert
Hall, Luke
Hammond, rh Mr Philip
Hammond, Stephen
Hancock, rh Matthew
Hands, rh Greg
Harper, rh Mr Mark
Harris, Rebecca
Hart, Simon
Haselhurst, rh Sir Alan
Hayes, rh Mr John
Heald, Sir Oliver
Heappey, James
Heaton-Harris, Chris
Heaton-Jones, Peter
Henderson, Gordon
Herbert, rh Nick
Hinds, Damian
Hoare, Simon
Hollingbery, George
Hollinrake, Kevin
Hollobone, Mr Philip
Holloway, Mr Adam
Hopkins, Kris
Howarth, Sir Gerald
Howell, John
Howlett, Ben
Huddleston, Nigel
Hunt, rh Mr Jeremy
Hurd, Mr Nick
Jackson, Mr Stewart
James, Margot
Javid, rh Sajid
Jayawardena, Mr Ranil
Jenkin, Mr Bernard
Jenkyns, Andrea
Jenrick, Robert
Johnson, Boris
Johnson, Gareth
Johnson, Joseph
Jones, Andrew
Jones, rh Mr David
Jones, Mr Marcus
Kawczynski, Daniel
Kirby, Simon
Knight, rh Sir Greg
Knight, Julian
Kwarteng, Kwasi
Lancaster, Mark
Latham, Pauline
Leadsom, Andrea
Lee, Dr Phillip
Lefroy, Jeremy
Leigh, Sir Edward
Leslie, Charlotte
Letwin, rh Mr Oliver
Lewis, Brandon
Lewis, rh Dr Julian
Liddell-Grainger, Mr Ian
Lidington, rh Mr David
Lilley, rh Mr Peter
Lopresti, Jack
Lord, Jonathan
Loughton, Tim
Lumley, Karen
Mackinlay, Craig
Mackintosh, David
Main, Mrs Anne
Mak, Alan
Malthouse, Kit
Mann, Scott
Mathias, Dr Tania
May, rh Mrs Theresa
Maynard, Paul
McCartney, Karl
McLoughlin, rh Mr Patrick
McPartland, Stephen
Menzies, Mark
Mercer, Johnny
Merriman, Huw
Metcalfe, Stephen
Miller, rh Mrs Maria
Milling, Amanda
Mills, Nigel
Milton, rh Anne
Mitchell, rh Mr Andrew
Morgan, rh Nicky
Morris, Anne Marie
Morris, David
Morris, James
Morton, Wendy
Mowat, David
Mundell, rh David
Murray, Mrs Sheryll
Murrison, Dr Andrew
Neill, Robert
Newton, Sarah
Nokes, Caroline
Norman, Jesse
Nuttall, Mr David
Offord, Dr Matthew
Parish, Neil
Patel, rh Priti
Paterson, rh Mr Owen
Pawsey, Mark
Penning, rh Mike
Penrose, John
Percy, Andrew
Perry, Claire
Phillips, Stephen
Philp, Chris
Pickles, rh Sir Eric
Pincher, Christopher
Poulter, Dr Daniel
Pow, Rebecca
Prentis, Victoria
Prisk, Mr Mark
Pritchard, Mark
Pursglove, Tom
Quin, Jeremy
Quince, Will
Raab, Mr Dominic
Redwood, rh John
Rees-Mogg, Mr Jacob
Robertson, Mr Laurence
Robinson, Gavin
Robinson, Mary
Rosindell, Andrew
Rudd, rh Amber
Rutley, David
Sandbach, Antoinette
Scully, Paul
Selous, Andrew
Shannon, Jim
Shapps, rh Grant
Sharma, Alok
Shelbrooke, Alec
Simpson, rh Mr Keith
Skidmore, Chris
Smith, Chloe
Smith, Henry
Smith, Julian
Smith, Royston
Soames, rh Sir Nicholas
Solloway, Amanda
Soubry, rh Anna
Spelman, rh Mrs Caroline
Spencer, Mark
Stephenson, Andrew
Stevenson, John
Stewart, Bob
Stewart, Iain
Stewart, Rory
Streeter, Mr Gary
Stride, Mel
Stuart, Graham
Sturdy, Julian
Sunak, Rishi
Swayne, rh Mr Desmond
Swire, rh Mr Hugo
Syms, Mr Robert
Thomas, Derek
Throup, Maggie
Timpson, Edward
Tolhurst, Kelly
Tomlinson, Justin
Tomlinson, Michael
Tracey, Craig
Tredinnick, David
Trevelyan, Mrs Anne-Marie
Truss, rh Elizabeth
Tugendhat, Tom
Turner, Mr Andrew
Tyrie, rh Mr Andrew
Vara, Mr Shailesh
Vickers, Martin
Villiers, rh Mrs Theresa
Walker, Mr Charles
Walker, Mr Robin
Wallace, Mr Ben
Warburton, David
Warman, Matt
Watkinson, Dame Angela
Wharton, James
Whately, Helen
Wheeler, Heather
White, Chris
Whittaker, Craig
Whittingdale, rh Mr John
Wiggin, Bill
Williams, Craig
Williamson, rh Gavin
Wilson, Mr Rob
Wollaston, Dr Sarah
Wood, Mike
Wragg, William
Wright, rh Jeremy
Zahawi, Nadhim
Tellers for the Noes:
Jackie Doyle-Price
and
Guy Opperman
Question accordingly negatived.
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Petition
Road Safety on Spencefield Lane (Leicester)
7.12 pm
Keith Vaz (Leicester East) (Lab): I would like to present a petition about—[Interruption.]
Mr Speaker: Order. Before the right hon. Gentleman speaks to his petition, let me ask Members who are unaccountably leaving the Chamber and therefore not hearing of its contents and are not staying to hear the Adjournment debate, which is at least as unaccountable, to be good enough to leave the Chamber quietly. That would be appreciated. We still have two parliamentary delights this evening, and it is good to know that at least some Members have stayed for those two delights.
Keith Vaz: Thank you, Mr Speaker. That is the first time I have been called a delight, and I am most grateful.
I wish to present a petition based on a local initiative signed by 362 local residents. It is a petition collected by local parents and residents, and I want to thank the three local councillors in the ward, Councillors Deepak Bajaj, Ratilal Govind and Sue Hunter for raising awareness of the issue. It concerns the safety of pupils as they cross Spencefield Lane opposite St Paul’s Catholic school and the Krishna Avanti Hindu primary school. At the moment, the road is very dangerous, and the residents, local parents and the schoolchildren want to raise this petition.
The Petition of residents of Leicester East,
Declares that road safety has become a serious concern on Spencefield Lane, opposite St Paul’s Catholic School and Krishna Avanti Primary School; further notes that parents, teachers and local residents fear that inadequate pedestrian crossings and road safety measures risk the safety of school children and vulnerable adults who cross the road each day; and further that a local petition on this issue was signed by 362 individuals.
The Petitioners therefore request that the House of Commons urges Leicester City Council to implement measures to improve road safety on Spencefield Lane, including a pedestrian crossing, without delay.
And the Petitioners remain, etc.
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Alternative Transport Fuels
Motion made, and Question proposed, That this House do now adjourn.—(Charlie Elphicke.)
7.14 pm
Mrs Cheryl Gillan (Chesham and Amersham) (Con): I am delighted to have secured this Adjournment debate and I hope that I have not misled the House with its title, because today I want to ask about a specific fuel. I want to ask the Department for Transport about its position on the new diesel substitute fuel, aqua methanol, and its potentially vital role in reducing diesel exhaust pollution.
The previous Labour Government’s diesel-friendly policies have led to a serious diesel particulate and nitrogen oxides pollution problem, and there are dreadful health consequences. Ministers will be aware of the recent Supreme Court judgment indicating the urgency of the Government’s acting to alleviate this health problem. That would also mean that the UK could avoid incurring extremely large fines for failing to meet EU air quality standards.
On a day when we have had a very large environmental lobby at the House of Commons, I want to ask the Under-Secretary of State for Transport, my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones), whom I welcome to his role and to the Front Bench, what he will do to support a fuel that will contribute to reducing emissions and improving our air quality.
In 2001, my constituent Peter Dodd and his company Zero-m drove a senior official from the Department for Transport along Oxford Street in a very special London black cab. That cab was unique because it ran on aqua methanol and emitted virtually no poisonous particulates or nitrogen oxides. In the following six years or so Zero-m, sponsored by the Department for Transport and the Treasury, converted vans and heavy goods vehicles to run on aqua methanol so that those other major sources of diesel pollution could be cleaned up.
The resulting report, delivered in 2009, confirmed without doubt that aqua methanol could have a major impact on diesel pollution, could reduce carbon dioxide, could reduce UK exposure to oil prices and, most importantly in these continuing times of austerity and unlike nearly all other alternative fuels, would require only modest Government financial support during its introductory phase even if oil prices stayed low.
Jim Shannon (Strangford) (DUP): Does the right hon. Lady agree that there are other alternatives, such as electric cars? That is a new way of reducing pollution across the whole community. Does she feel that the Government should emphasise that as well?
Mrs Gillan: The hon. Gentleman has pursued that issue, and I hope that the Minister will have taken note. It is important that the Government consider alternative fuels, particularly in the light of the detrimental effect on our environment of the fuels that are currently in use.
The report concluded that aqua methanol should be introduced as soon as possible, so the question is why there are not yet any clean aqua methanol vehicles on our city streets. The answer is that the Europe-wide fuel
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tax rules are blocking their introduction. They mean that aqua methanol would cost some £1.90 a litre at the pump and, obviously, that is a commercially impossible price.
Fortunately, after thorough investigation and confirmation of the report’s findings under the coalition Government, the Treasury has now agreed to make the tax changes necessary to enable the new fuel to be competitively priced against diesel in the UK by putting it on a level playing field with other gas-based fuels. It announced its intention to do so in the two most recent Budgets and autumn statements and finally included the necessary legislation in the last Finance Bill, just before the recent election. However, the change has still not been enacted, because in the wash-up process the Opposition objected to it despite the fact that the entire green fuel challenge project to demonstrate the need for aqua methanol and prove its worth in exchange for the tax change was initiated and completed during their time in government.
I am now hopeful that the Chancellor will take the measure through on 8 July, so the debate is meant to emphasise the importance to health of enacting this new fuel tax measure immediately. Equally importantly—we have yet to have an undertaking from Government on this—we must integrate the fuel into the DFT’s fuel strategies and funding programmes to accelerate its introduction. The importance of doing that as soon as possible can hardly be overstated.
It is unlikely that many people will have heard of aqua methanol until now, but those with long memories will remember the green fuel challenge, which aimed to foster the development of greener transport fuels. Of the three groups selected for support, the highest award was given to Zero-m Ltd, a company in my constituency. Its proposition was that converting commercial diesel vehicles to aqua methanol offered many advantages, including reducing particulate emissions from diesel engines and lower NOx, which is the diesel exhaust gas responsible for forming smog and acid rain, and which is central to the formation of tropospheric ozone.
Further, the company also discovered that renewable aqua methanol could be made more easily and cost-effectively than most, possibly all, other proposed green transport fuels. In addition, as if that were not enough, it discovered that substituting aqua methanol for diesel would improve UK fuel security and reduce our exposure to politically volatile crude oil prices, because aqua methanol is derived not from crude oil but from the huge and growing global resource of natural gas. Importantly, from the climate change point of view, it can also be made from a wide range of renewable sources, including, rather amazingly, renewable electricity and the carbon dioxide in the air, turning that controversial little climate change bugbear into a jolly good friend.
By introducing methanol made from plentiful natural gas in the short term—so-called brown aqua methanol—we can immediately strengthen the fight against diesel pollution, and at the same time, relatively quickly, win CO2, fuel security, exports and job benefits. Once brown aqua methanol is established, it can be replaced down the track by chemically identical green renewable methanol once that form becomes economically viable when compared with diesel. Brown natural gas-based methanol paves the way and acts as that solid bridge to
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near-zero-CO2 green methanol, without requiring the massive Government subsidies that would be incurred in trying to go directly to the green form without using the brown bridge.
Between them, the members of the Zero-m team have the most amazing experience. Together they have more than a century of expertise in alternative fuels, so these constituents of mine really do know what they are talking about. They particularly understand how oil markets work and the importance of minimising the need for Government subsidies, because oil prices can go down as well as up. When they go down—and history shows that they can stay low for a long time—subsidies that looked fairly short-term and affordable can suddenly look very high and indefinite. In fact, they can become, as they often have in the past, completely unsustainable economically.
With long experience of seeing high-cost alternative fuel projects fail because Governments cancelled the subsidies when oil prices fell, Zero-m’s approach throughout has been to find a way to introduce a fuel that will be commercially viable when oil prices are low. It is interesting to note, anecdotally, that before the second world war it was believed that there was only 12 years’ worth of oil left at the then consumption rate of about 8 million to 10 million barrels a day. Today, the numbers in BP’s June 2015 statistical review show that apparently we have 52 more years of reserves at the 2014 global consumption rate of 92 million barrels a day. Therefore, we are using about 10 times more oil today and it is going to last four times longer than they thought it would last in 1935.
Although it is probably true that oil could run out at some distant point in the future, the oil industry has a habit of finding new deposits and even cheaper means of extracting ever more from them, extending today’s problem with pollution into the future.
Zero-m believes that aqua methanol could be the earliest commercially viable alternative, because it only needs launch support to begin replacing diesel made from oil. Of course, it has to be remembered, but rarely is, that the more that subsidised alternative fuels displace oil, the greater the over-supply of oil will become and the lower the oil price is likely to go. That is the Catch-22 of developing alternative fuels: they look good when the oil prices are high, but if they succeed they will almost inevitably cause oil prices to fall.
Biofuels are one of the key planks of the European Union strategy to reduce emissions, but a 2015 departmental report on options for energy transport policy to 2030 showed that crude oil prices in excess of $250 a barrel are needed before most anticipated renewable biofuels can become commercially viable on a stand-alone basis. Even the Government are expecting bioethanol and biodiesel to need heavy taxpayer subsidy far into the future through the renewable transport fuels obligation.
It is surely worrying that even that Government report accepts that biofuels are not expected to be commercially viable even by 2030, and possibly far beyond. Add to that the fact that including biodiesel in diesel fuel does virtually nothing to reduce particulates and NOx, the key city street-level pollution issue, and that, even worse, including biodiesel in normal fossil
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diesel actually reduces miles per gallon. It seems to me that aqua methanol is one initiative that can definitely be foreseen to be commercially viable at today’s low oil prices of around $65 a barrel, which is massively below the over $250 a barrel that the Government are expecting biodiesel to cost in 2030, as set out in the report I referred to earlier.
Zero-m has calculated that, in terms of particulates and NOx reduction, converting one diesel van to aqua methanol, at an estimated cost of £5,000, is equivalent to converting five cars to electricity, which costs the Government at least £25,000 in subsidies. Converting one heavy goods vehicle, at an estimated cost of £15,000, would deliver the same diesel fume reductions as converting 30 cars to electricity, at a cost of more than £150,000. If the Government funded, say, £5,000 for each van and £15,000 for each HGV converted to aqua methanol, that investment could save them £20,000 and £135,000 respectively, versus what it would cost via the electric car route, and still achieve the same result.
When it comes to cutting street-level diesel pollution, aqua methanol has the ability to give us a significantly bigger bang for our tax pound than relying mainly on the introduction of electric vehicles—or indeed of hydrogen vehicles, which are likely to be even more expensive, with commercial viability even further into the future. However, despite all that promise, aqua methanol is still not an integral part of the Department for Transport’s published alternative fuels strategies and funding plans, even though all common sense suggests that it should be strongly backed to accelerate and bolster current efforts to tackle the awful diesel pollution problem. Waiting for electric cars or hydrogen buses to fix the problem is being tried, and has been tried for some time, but still the diesel pollution worsens, with consequential health problems compounding the costs to the Government.
Tonight I am asking the Minister to add this potentially powerful new string to the Government’s bow in the urgent battle to improve air quality. The proposed tax change is the culmination of over 14 years of Government-initiated and sponsored work to investigate this exciting new fuel and then enable its introduction. The new tax measure has been approved by all relevant Government Departments, including the Treasury, the relevant legislation has been drafted and all necessary consultations have been completed successfully. There is nothing further that the Treasury needs to do now beyond including the measure in the Finance Bill on 8 July, with an early implementation date.
I have worked alongside my constituents on this journey, and it has been a long and painful one. We are very grateful that the Treasury has now heard the message. Aqua methanol can and should be a major and effective part of the solution to this problem, and it would require no financial support from the Government after the introductory phase.
I am sure that the Government will now enact the promised deferred tax change. Tonight I am asking the Department for Transport to complete the picture and integrate aqua methanol fully into its published strategies and funding policies. Without the tax change, the launch of aqua methanol is economically unviable and will not occur, and all the fine opportunities and valuable benefits will be forgone. However, without the other half of the equation—the Department for Transport—supporting
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aqua methanol, both financially and with publicity, our city air will continue to be full of dirty diesel particulates and NOx for much longer than it need be. With both those steps in place, Ford, Mercedes, Iveco, Scania and DAF, to name just a few of the most popular van and HGV manufacturers in the UK, could start making and importing clean aqua methanol-capable vehicles into the UK.
I would like to applaud the Minister and the Chancellor of the Exchequer for having the foresight to see that aqua methanol deserves to be put on the same taxation footing as other natural gas-based transport fuels. Now I also urge them to redirect funds from some longer-term, higher-cost initiative, such as hydrogen, just as the Department is already doing for compressed and liquid natural gas. Given the severity of the pollution problem, continuing with the status quo is not an acceptable or justifiable option. By being an early adopter, we can improve our environmental credentials. I hope that the Minister will give a response that encourages my constituents and enables us to kick-start the introduction of aqua methanol, so that we can clean up our air as quickly as possible.
7.30 pm
The Parliamentary Under-Secretary of State for Transport (Andrew Jones): I congratulate my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) on securing this debate about alternative transport fuels, and specifically aqua methanol. It is very topical because Governments across the world are looking to reduce their reliance on foreign energy imports, clean the air in their towns and cities, and reduce carbon emissions. We are seeing increasing urbanisation, and there is a recognition that fossil fuel is not only finite but increasingly carbon intensive.
My right hon. Friend is correct to say that the UK faces significant environmental challenges. In 2013, our domestic transport greenhouse gas emissions accounted for 21% of overall domestic greenhouse gas emissions. Road vehicles are responsible for 92% of CO2 emissions from transport and 80% of roadside nitrogen dioxide. Every year, about 29,000 early deaths are attributable to poor air quality.
There is also an EU legislative context. The UK has a legal requirement to meet EU limits on exposure to air pollutants. As an EU member state, we are committed to reducing greenhouse gas emissions in road transport by 20% by 2020 and 40% by 2030.
In the recent general election, my right hon. Friend and I stood on a manifesto that reaffirmed our commitment to the Climate Change Act 2008, and road transport has to play its part if we are to reduce emissions by 80% by 2050. The manifesto also committed us to do even more to tackle air pollution, to back green energy that is value for money, and to continue to foster an economy that supports high-knowledge job creation. We made those commitments because the Government continue to see the environmental challenges for transport as an opportunity. Alternative transport fuels will have a role to play in helping us to deliver those commitments.
We have made much progress towards meeting the challenges we face. Air quality has improved significantly in recent decades. Harmful particulate matter emissions
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from road transport have fallen by 31% since 1990. Between 1992 and 2012, total nitrogen dioxide emissions and background concentrations more than halved. Through the supply of sustainable biofuels under the renewable transport fuel obligation, we are making significant carbon savings. In 2013-14, the use of biofuels was equivalent to taking 1.35 million cars off the road.
All that is just part of a wider strategy through which we are working with other Departments, industry and local authorities to reduce harmful emissions across transport modes. Some £2 billion has been committed since 2011 to increase the uptake of ultra-low emission vehicles, fund greener transport initiatives and support local authorities to take action. What we are doing goes much wider than providing grants to support the uptake of electric vehicles, although I must mention that I will be making my debut behind the wheel of an electric vehicle tomorrow morning, as Nissan is lending the Department a Leaf. I am looking forward to driving it.
The wider action that we have taken includes making £30 million available so that bus operators and local authorities across England and Wales can bid for low emission buses and supporting infrastructure. A further £8 million has been awarded to 23 local authorities for cutting-edge, pollution-reducing technologies, which will be fitted to more than 1,200 vehicles. That included £500,000 of funding for Birmingham City Council to convert 80 taxis from diesel to liquefied petroleum gas. As was announced on 26 March, there is £6.6 million to support the establishment of an initial network of 12 hydrogen refuelling stations, heralding the imminent arrival of hydrogen fuel cell vehicles on UK roads. The Government are addressing the environmental impacts associated with road freight through the low carbon truck trial, which is providing more than £11 million to part-fund about 350 low-carbon commercial vehicles. Sustainable biofuels are also likely to have an important role to play in reducing carbon emissions in other sectors, such as freight and aviation, where there are limited alternatives for decarbonisation. We are considering options to support this.
In aviation, the UK is working hard, through the International Civil Aviation Organisation, to try to secure agreement on a global market-based measure to reduce international aviation emissions. In the meantime, the UK continues to support the use of regional measures, in particular the Aviation EU Emissions Trading System.
In rail, we are tackling greenhouse gas emissions through a major electrification programme, along with the procurement of new electric and low emission trains that will replace older diesel trains.
In shipping, we are pleased that a number of major ports in Europe have now declared their intention of establishing liquefied natural gas bunkering infrastructure in the next couple of years, given that LNG emits fewer harmful emissions than marine diesel fuel. That is essential, because ship owners are unlikely to invest in LNG-powered ships unless there are adequate refuelling facilities.
Returning to road transport, we expect to announce this summer the winners of an advanced biofuel demonstration plant competition. This will award up to £25 million of capital funding over three years to support the construction of plants in the UK.
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I mention those initiatives to show the range of Government actions across different fuels and across different modes of transport. It is clear that our approach is about providing support in a technologically neutral way, focusing on the range of evidence available. This approach has been successful in encouraging the most sustainable fuels and low emission vehicles. I am also confident that, given the UK’s strengths in innovation and research, we are well placed to succeed in the global market place in rising to the environmental challenges we face.
Further to the lower duty rate for methanol announced in last year’s Budget, my right hon. Friend suggested that we should look to support innovation by further integrating aqua methanol into the Department’s funding policies and published strategies. We of course recognise that, while overall air quality has improved over the past 20 years, much more needs to be done, in particular to reduce roadside concentrations of nitrogen dioxide. The fuel industry is complex, diverse and rapidly developing. Fuel production and supporting infrastructure are also at different levels of maturity. As policy makers, we must therefore give careful consideration to a range of possible solutions for tackling air quality, such as potential improvements in vehicle technology and fuels, and other sustainable travel policies and options.
I understand that the actual air quality benefits of aqua methanol are dependent on the vehicle technology— for example, particulate traps—in which it is used. The vehicle technology will determine the extent to which methanol replaces diesel and any potential reduction in air quality pollutants. I would like to reassure my right hon. Friend that, as we move forward with our policy development, aqua methanol will most certainly continue to be considered among all the other options on its merits, as is the case with all our funding programmes. I agree that aqua methanol is potentially a stepping stone to securing greenhouse gas emissions savings. However, if aqua methanol is to deliver greenhouse gas emissions savings, it is important that the right feedstock is used to make it. These need to be renewable and sustainable to deliver significant greenhouse gas emissions savings we are seeking.
My right hon. Friend mentioned the opportunity to produce sustainable methanol from CO2 and renewable electricity, which I have to say is a very attractive policy option. Further to a call for evidence on advanced fuels at the end of 2013, the Department has considered the potential role of such non-biological renewable fuels and possible support mechanisms for advanced fuels, as they may deliver the significant greenhouse gas reductions we are seeking. Our examination of advanced and alternate transport fuels has continued through to the report produced in March by the Transport Energy Task Force, entitled “Options for energy transport policy to 2030”.
The task force was set up by the Department and the Low Carbon Vehicle Partnership in October last year, and is made up of experts from industry and non-governmental organisations. Primarily, it considered a range of scenarios to meet our 2020 greenhouse gas emissions reduction and renewable transport fuel targets, as well as considering how low carbon fuels can help to reduce greenhouse gas emissions from UK transport in
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the period to 2030 and beyond. We are considering the report carefully as part of work to transpose amendments to the fuel quality directive, which have recently been agreed, and the renewable energy directive, which we hope will be finalised very shortly.
As evidenced by the Transport Energy Task Force report, we will clearly need sustainable biofuels to meet our renewable energy and greenhouse gas reduction targets. I therefore welcome the investments made by UK biofuel suppliers to date in what has been a very difficult investment environment, and I will shortly be meeting with a number of them. The delay in agreement of measures to address indirect land use change at EU level over the past several years has caused uncertainty for biofuel suppliers, and I recognise from my own business career that nothing deters investment more than uncertainty. I am therefore keen that we now get on with the business of implementing these measures as soon as possible.
This debate is timely. The issue of air quality is rising up the agenda and is certainly a priority for me. I have already met colleagues from the Department for Environment, Food and Rural Affairs, and I expect to have further such meetings as we take our plan forward. I recognise that aqua methanol can play a role in tackling that problem.
Mrs Gillan: I thank the Minister for taking a positive approach to a fuel that could play an important part in his strategy. Will he do me the honour of meeting my constituents and the directors of Zero-m to look at this in much greater detail? I appreciate that he is new to his post, but it would give me great pleasure to bring them into the Department to talk to him about the benefits of aqua methanol.
Andrew Jones: I happily make that commitment and would be delighted to meet my right hon. Friend and her constituents. My approach to this and all issues within my area is to have an open-door policy and to work with the industry, so I would be delighted to have such a meeting. My officials will contact her to set it up.
The progress ahead, with the take-up of electric and ultra-low emission vehicles, is more in the area of cars and light vans; HGVs are harder to crack, and it is interesting to see how aqua methanol could again play a role. My right hon. Friend asks that the Department take the initiative. I will be doing just that, and aqua methanol will be included in all our considerations.
Once again, I thank my right hon. Friend for securing this debate. The Government recognise that vehicles are likely to require liquid and gaseous fuels for decades to come and that not all modes of transport are viable for electrification in the near future. It is therefore crucial that the UK develops a range of technologies to produce alternative low carbon fuels, reduce air pollutants from road transport and grow the UK’s green economy.
We shall continue to work closely with experts from the industry and environmental non-governmental organisations on future support mechanisms, and we will continue to review the support provided, with a view to securing the best environmental outcomes, supporting a competitive market, minimising the cost to the industry, the taxpayer and the motorist, and making our environment a priority—particularly the
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cleaner air my right hon. Friend mentioned. Aqua methanol will be a part of that review, and I again thank her for highlighting its importance to tackling the issues we face.
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