Schedule 19 - Capital allowances: cars with low carbon dioxide emissions
Finance Bill
11:00 am
Mr John Pugh (Southport, Liberal Democrat)
I hope that you will forgive me, Mr. Benton, if my contribution ranges over several aspects of this schedule—and if it also, perhaps, refers to amendments that are yet to be discussed.
The Minister said that I had been mealy-mouthed in my praise of his recommendations about community sport, and so on. I shall not be mealy-mouthed in this case. I shall not accuse the Minister or the Government of being insincere in their attempts to produce good behaviour by fiscal measures. They want us to use vehicles that produce less pollution, and thereby to create a better environment.
However, we must test what is being presented to us to discover whether it is a real improvement or simply a cosmetic improvement, and to see whether the recommendations, as they are currently framed, offer a sufficiently refined instrument to do the job.
There is a lot of premature optimistic talk about the environment and the absence of pollution. The Automobile Association states that, by the agreement of car makers alone, the Kyoto protocol's demands on motorists will be met in this country, and the Government White Paper of 1998 stated that there would be a 70 per cent. reduction in particulate emissions between 1996 and 2010.
All of that is good news and, in the Government's defence, we must accept that what we have before us is not an isolated recommendation, but part of a package—it does not stand alone, as I am sure that the Minister will say. However, we must ask ourselves whether the instrument is sufficient do the job that it is intended to do.
The Government have every encouragement to do a little more than they are doing at present. The recently published European Transport White Paper encourages Governments to go beyond the minimum goals. It states that the new Community rules
''will help member states create the necessary economic and legal conditions for exceeding objectives.''
In other words, Europe is giving a green light—and a rich menu to choose from. However, the Government appear only to be encouraging purchasers of cars to choose a car that has a low rate of CO2 emission, with the intention of encouraging manufacturers to produce more of them. In one sense, that is a sensible strategy, because the vast majority of people will buy standard petrol cars that have CO2 emissions, and it is far better that they buy cars with low CO2 emissions. However, the legislation does not sufficiently benefit or highlight alternatives, to which the amendment refers. The European Commission set
targets of 2 per cent. for the use of biofuels to be reached more or less now, and 6 per cent. by 2010. It also set a target of 20 per cent. for replacing conventional fuels with substitutes by 2020. The legislation seems a long way from producing that by itself—it is not sufficiently hard-edged. The Government have an opportunity to offer severe fiscal encouragement to alternatives such as biofuels and natural gas, and, in the long term, hydrogen.
The Government say that they are looking ahead, and propose in clause 60 to encourage imaginative developments, but there are things that they could do now which, especially in the case of LPG and biofuels, could be done at little cost. On our way here today, few of us would have passed many LPG or biodiesel vehicles, and I assume that none of us passed a hydrogen-driven vehicle or would have recognised one had we done so. In offering fiscal encouragement, the Treasury is hardly hampering its finances but, in the long term, it could send an enormously important signal as to where the future lies. The Government have missed the opportunity to do so in this legislation, and I should like the Minister to tell us how they might do so.