Schedule 19 - Capital allowances: cars with low carbon dioxide emissions
Finance Bill
11:00 am
Mr Christopher Chope (Christchurch, Conservative)
The amendments are important because they probe the Government's commitment to liquefied petroleum gas. The Government say in the Bill that there should be enhanced capital allowances for several low-emission vehicles, but not for others. I noticed that a press release issued at the time of the Budget said,
''100 per cent. enhanced capital allowances for low emission cars''.
As with so many things, when one examined the small print, one found that that applied only to cars with low emissions of CO2 but not other pollutants.
The amendments would bring cars that run on LPG within the 100 per cent. first-year allowance. It would not address all cars that run on LPG, but cars that run on LPG and produce relatively low levels of CO2.
At present, it is not possible for an LPG car to meet the 120 g per km test but it is possible for such a car to meet the 240 g per km test, which is why the amendment has been drafted in such a way. There is suspicion that the Government are paying lip service to green technologies. However, when the ordinary man in the street thinks seriously of investing in an LPG-fuelled car or a dual-fuel vehicle, the Government start to go cold on whether they will provide a long-term incentive for such investment in greener technology.
The suspicions are not wild. They are supported by the Government's refusal to confirm that the fuel duty differential between LPG and other fuels—diesel and petrol—will extend beyond 2004. That is a near time horizon. I recently renewed my House of Commons pass and noticed that it now extends to 2006. We are dealing not with the renewal of a pass but with people investing in new models of vehicle. We should encourage vehicles that use both LPG and diesel or petrol and we should encourage people to consider LPG vehicles as a serious option.
Having read the Budget day press release, we read with some amazement the small print of the Bill, which states that LPG vehicles will be excluded from the benefit of 100 per cent. enhanced capital allowances,
notwithstanding the great benefits that accrue to the environment and people's health from LPG compared with diesel or petrol-powered vehicles. Box 7.1 of the Red Book shows the days on which United Kingdom air pollution is moderate or higher. UK air pollution is generated not by CO2 emissions, which impact on climate change, but by other pollutants that largely, especially in urban areas, result from the combustion of road fuels. In paragraph 7.7 on page 127 of the Red Book, the Government state:
''Poor air quality poses risks to human health, quality of life and the natural environment. It affects everyone, particularly children and elderly people . . . In general, air quality in the UK is improving . . . But much . . . remains to be done . . . exposure to air pollution continues to be associated with an unacceptable number of hospital admissions and premature deaths each year.''
All Committee members would agree wholeheartedly with those sentiments. However, now the Government have the chance to give an incentive for people to invest in LPG-powered vehicles that also have low CO2 emissions, and they have missed the opportunity—unless they take that which the amendments present.
I remind the Committee of some of the benefits that flow from LPG compared with diesel and petrol, the significance of which is sometimes ignored. Although LPG vehicles tend to emit less carbon dioxide than do conventionally fuelled vehicles, no LPG vehicle can yet meet the 120 g carbon dioxide test. If that is the sole criterion for what constitutes low-emission vehicles, LPG vehicles will be unable to meet it. However, LPG engines are 50 per cent. quieter than diesel engines and marginally quieter than petrol engines. As we know, noise is a big issue for many of our constituents. LPG emissions of benzene are about one thirteenth those of petrol and half those of diesel. Petrol emits about two and a half times the amount of carbon monoxide emitted by LPG.
The health implications of particulates are the most significant factor. Recent tests have shown that LPG emits 99 to 99.8 per cent. fewer ultra-fine particles than even ultra-low sulphur diesel. For every 1,000 parts that enter the atmosphere as a result of burning ultra-low sulphur diesel, LPG results in only between about two and 10 parts. That is an amazing improvement in terms of reducing particulate emissions, and the Government and the Committee should take note of that. Also, vehicles that run on LPG emit one fifth of the level of sulphur dioxide that is emitted by petrol vehicles, and one ninth of the level that is emitted by diesel vehicles. With regard to oxides of nitrogen, LPG engines offer a 90 per cent. reduction of NOx compared with diesel, and a 40 per cent. reduction compared with petrol.
Therefore, if the Government truly mean to provide 100 per cent. enhanced capital allowances for low-emission cars, there is a case for including all LPG vehicles within that enhanced capital allowance scheme. In that regard, this amendment goes part of the way. It says, ''Let us go along with the overriding objective of reducing carbon dioxide emissions because of the impact of that on global warming, but let us also include LPG vehicles, which are reducing carbon dioxide to a slightly lesser extent, but which are
also producing corresponding and much larger benefits by reducing pollutants of other kinds that impact on the health and environment of our people.''
I hope that the Government will take these amendments seriously, and that the Minister, in his response to the debate, will say something about why the Government are refusing to say anything about making a commitment with regard to extending the fuel duty deferential for LPG beyond 2004—which I hope that he will accept is a short-term horizon.
I hope that the amendments will find favour with the Committee.