Clean Fuels

Part of the debate – in the House of Commons at 11:12 am on 19th October 2001.

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Photo of Malcolm Moss Malcolm Moss Conservative, North East Cambridgeshire 11:12 am, 19th October 2001

The hon. Gentleman makes his point. We agree that this is a very important issue, and I have welcomed the fact that we are debating it, but we know the circumstances in which this debate has been initiated. Some people may have thought it much more appropriate to use this parliamentary time to debate more contemporary subjects, such as the current international crisis or the collapse of Railtrack. The Minister is from the relevant Department, and given the situation that has arisen in the past week, I should have thought it more appropriate now for him to explain how the Government propose to fill the black holes in their financing of the railway industry in the future.

May I connect the correct security concerns with today's debate by asking the Minister whether he is aware that there are only eight oil refineries in Great Britain? If last year's fuel crisis taught us anything, it is that it does not take much to prevent distribution from those refineries, thus causing a national fuel shortage. What assessment has the Minister made of the threat of terrorist action against some or all those refineries? Can he assure us that the same security measures that are being put in place at reservoirs and nuclear power stations are being used to protect those refineries from threat?

To return to today's business, I assure the Minister that the Opposition welcome any sensible measures that encourage greener fuels and greener vehicles. We were disappointed that, despite promising in 1997 they would be "the greenest Government ever", it took this Government more than three years to announce a tax cut for ultra-low sulphur petrol, but we welcome their eventual decision. Members will recall that tax breaks introduced by Conservative Governments helped to encourage the shift away from leaded petrol to unleaded, and we welcome the fact that the Government are following in our footsteps. Can the Minister tell us whether the Government plan to go even further and encourage the production of no-sulphur fuels? What fiscal measures are the Government considering to speed the introduction of that even greener fuel?

We also welcome the tax cuts that the Government have made to compressed natural gas and liquefied petroleum gas. My hon. Friend Mr. Green was one of the first to suggest in the previous Parliament that tax on LPG and CNG should be cut to the lowest minimum EU level. The Minister should give the House a firmer assurance than he did in response to an intervention made by my hon. Friend Mr. Wiggin about the Government's ambition to maintain the tax on those clean fuels at that minimal level for the long term, not just until 2004, as the Chancellor has suggested. Converting cars to run on cleaner fuels can be a costly and bureaucratic business, as we all know, and consumers need to know that they are making an investment that the Government will defend in the longer term.

The Minister is, no doubt, aware that the number of vehicles that run on LPG, and particularly CNG, is still very small in this country—a point made by my right hon. Friend Mr. Knight. As the Minister confirmed, about 50,000 vehicles run on LPG in this country, but there are nearly 10 times that number in Holland. What strategy do the Government have to encourage a greater take-up of LPG at petrol stations, particularly in rural areas?

The Minister said that 900 such stations already exist and are opening at the rate of one a week, but that is small beer compared with the availability of conventional petrol and diesel at our stations. What discussions has the Minister had with the motor industry to ensure that more LPG vehicles are put onto the market, so that buyers do not have to arrange separate conversions? Do the Government have any targets regarding the number of vehicles that can run on LPG?

I thank the Minister for expanding on the measures that the Government intend to introduce to promote biofuels, which do not add to global warming. The EU proposes that 2 per cent. of road transport fuels should be biofuels by 2005. Does he intend to meet that target and, if so, how? Again, my hon. Friend the Member for Ashford proposed that biodiesel should be taxed at the same rate as road fuel gases. Will the Minister consider such a proposal?

Looking even further ahead, Conservative Members are keen to encourage a whole range of alternative-fuel vehicles, such as dual fuel, solar, electric and fuel-cell powered cars. We proposed a cut in vehicle excise duty for those vehicles, and I hope the Minister will put pressure on the Chancellor to consider such a cut in his next Budget. Hon. Members will be aware that the Government have decided to change the current system and band VED for new vehicles according to four CO 2 emissions rates. I understand the sentiment behind that policy decision, but why should it be based only on CO 2 emissions? Would it not be better to discourage all air pollution by basing VED rates on the total emission standards of vehicles? I should be grateful for an explanation of the Government's thinking on that decision, especially in relation to company cars.

As the Minister will accept, company cars are among the most environmentally friendly vehicles on our roads. The Government plan to abolish mileage allowances and use CO 2 emissions to calculate taxation levels that will hit the pockets of those who need to use their cars for business. For example, a sales manager running a 1.9 litre diesel car, which costs about £21,000 to put on the road, and who drives 25,000 business miles a year, will have to pay between £800 and £950 of extra tax a year. That stealth tax is certainly not helping British manufacturing and industry.

Is not the Minister aware that, for many, a company car is a vital tool for business and public transport is simply not an option? I hope that the Government change their mind and realise that the job of company car fleet management is an integral part of our economy, not an evil to be rooted out. The Minister should be working with the fleet industry to encourage it to take up cleaner LPG vehicles, not hitting it with a new tax.