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Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
I am pleased to serve under your chairmanship, Mr Robertson, and to introduce these two debates on reports by the Select Committee on Transport. The first is “Plug–in vehicles, plugged in policy?”, which we published last September. It focuses on Government policy to promote the take-up of electric vehicles, and I will concentrate on that issue in my remarks.
It is important to begin by putting the issue in its wider context. The UK has a target to reduce its carbon dioxide emissions to 34% below the 1990 level by 2020 and 80% below the 1990 level by 2050. Carbon emissions from cars account for about 15% of total emissions, so reducing emissions from cars is essential to meeting those targets. The Government are correct to be considering ways to decarbonise road transport. Carbon emissions from road transport have fallen in recent years. The use of biofuels—
Mrs Ellman
Carbon emissions from road transport have fallen in recent years. The use of biofuels and the development of hybrid vehicles, which use electricity generated from braking as well as conventional fuel, have helped to deliver that decrease. However, the economic downturn has been a more significant factor in keeping road traffic down. Carbon emissions may well rise again when the economy begins to recover. There is much more work to be done to make road transport more sustainable. As 65% of emissions come from exhaust pipes, reducing carbon emissions from fuel is essential, and there are a number of ways to do that: lighter cars use less fuel; engine performance can be improved to use conventional fuel more sparingly; biofuels are becoming increasingly common; and new technologies, such as hydrogen fuel cells, are on the horizon. In addition to hybrid vehicles, various types of electric vehicle can be plugged into the electricity network.
To achieve the required reductions in carbon emissions by 2050, a significant shift from conventional fuel to very low or zero-carbon fuel is necessary. The Government have already said that they hope to achieve that and want UK industry to lead the way in manufacturing the necessary new technologies. The Department for Transport has said it would like its policy on reducing carbon emissions from cars to be technology-neutral
“to create the incentives for industry to develop the technologies that reduce emissions, work for consumers and make economic sense”.
Its main focus has been on starting a market for plug-in vehicles. The Government predict that by 2015 we should expect to see
“tens of thousands of plug-in vehicles on the roads in the UK”
and perhaps hundreds of thousands by 2020, if not sooner. They have chosen to back them, because plug-in vehicles are now a commercial technology and other technologies, such as hydrogen fuel cells, are still at the development stage.
The most eye-catching aspect of Government policy to promote plug-in vehicles is the plug-in car grant, which offers up to 25% off a vehicle’s price up to a maximum of £5,000, with a similar grant available for van buyers. Applications for the grant are increasing, but at September 2012 only 2,629 cars eligible for the grant had been registered—a fraction of 1% of total car registrations. The £30 million budget for plug-in vehicles for 2011-12 was significantly underspent. It would take a leap of faith to imagine that the number of plug-in vehicles will reach “tens of thousands” in just two years.
The Transport Committee heard that a lack of consumer awareness about the availability of the plug-in car grant, as well as concerns about the performance and range of the vehicles, has held back demand. The Department told us that it was gathering information about how people use plug-in vehicles and how they perceive them, which it said would help to make the case for plug-in vehicles “even more compelling”. It also pointed to specific initiatives to promote the vehicles, such as helping to draft a guide to electric vehicles. Those initiatives are not enough to meet our recommendation for the Government to promote public understanding of the infrastructure and support available. Is the Minister satisfied that the Government are doing enough to publicise plug-in vehicles?
The Committee’s report draws attention to some unexpected changes in the tax treatment of plug-in vehicles in the 2012 Budget, including the unanticipated removal of some financial incentives. Motor manufacturers were universally critical of the changes, because they make plug-in vehicles less attractive to purchase for commercial car fleets and because they reduce confidence in what was described as a “fragile, fledgling market”. The Department told us simply that
“tax issues are a matter for the Treasury”.
It would seem that either the Department and the Treasury did not discuss the issue before the Budget or the Department was ignored. There was a better outcome from this year’s Budget, with an announcement of tax changes to take effect in 2015. I hope that that signals a major change and that tax policy will support transport policy on plug-in vehicles in the future.
Most plug-in vehicles sold so far have been bought for fleets. Fleet purchasers are less likely than ordinary motorists to be put off by the up-front cost of a plug-in car, which can still be in excess of £20,000, even when the plug-in car grant is taken into account. The Government have certainly taken some steps to promote such cars to fleet purchasers, but a glance at the website of the Office for Low Emission Vehicles shows that most of its emphasis has been on promoting the cars to the domestic purchaser. Only relatively affluent motorists are likely to be able to afford a plug-in car. The Committee spoke to researchers from Coventry university, who warned of the risk that the grants could subsidise second cars for affluent households, noting that people who had driven plug-in cars saw them as a “support vehicle” rather than a main car.
The recent report from the Institute for Public Policy Research suggests that Government fleet purchases, on which £400 million a year is spent, are likely to be a more productive way forward. Does the Minister acknowledge that there is more potential demand for plug-in vehicles from commercial fleets than from ordinary motorists? Does he agree that the Government could do more to promote sales to fleet purchasers? For example, what has been done so far to persuade local authorities or even Government Departments to switch to plug-in vehicles?
The Government have said that they hope that the grant will stimulate domestic demand for plug-in vehicles. Indeed, the IPPR sees car manufacturing as a potential major benefit to the economy. If manufacturers can be tempted into the market, the price of the vehicles should fall, further encouraging demand. There are concerns that manufacturers are not convinced that the market for plug-in vehicles will rapidly expand. I note that the recent report from the Royal Automobile Club Foundation for Motoring Ltd also mentions that point. Nissan had suggested it would build 50,000 of its plug-in car—the Leaf—each year at Sunderland, but it has been reported recently that production volumes will be much lower. Will the Minister comment on manufacturers’ confidence in the plug-in vehicles market?
The Government are closely involved with the provision of infrastructure for charging plug-in vehicles. The Committee looked in some detail at the plugged-in places scheme, which has come to an end. The scheme encouraged the installation of charge points in eight places in the UK. Some plugged-in places were very successful; at the time of our report, 640 charge points had been installed in London and 399 in north-east England. In Manchester however, also a plugged-in place, no charge points had been installed. Can the Minister explain how the plugged-in places scheme has been evaluated and what lessons have been learnt from the less successful areas?
The Committee identified a number of issues with charge points: first, there is no national network; and secondly, the vast majority of charge points installed charge over a period of several hours. Charge points that can recharge a car in minutes are much more expensive and, as a result, less common. It would take considerable planning and a number of days to drive a plug-in vehicle from London to Newcastle, and that inevitably has an impact on the purchaser. Each plugged-in place developed its own payment scheme for charging cars, further complicating long-distance travel. There are also different types of infrastructure around the country. The quick-charge points use a Japanese protocol, which is incompatible with German cars. The Government told us they would look to the market to resolve the problems.
We also found that the national charge point register does not include details of all the charge points installed by the plugged-in places scheme. We were told that the Government remained
“committed to the idea of a single repository of comprehensive national chargepoint data”
that was available to all, but it is not clear what they are doing to achieve that aim, which is fundamental to consumer confidence. Will the Minister agree to ensure that the national charge point register includes all charge points whose installation has involved public expenditure? Will he do more to promote the register, to help to convince people that a national recharging network exists?
As a successor to plugged-in places, the Government recently announced that local authorities in England will receive £11 million over two years to fund on-street charging for residents and to install charge points on major roads. The Local Government Association has commented that the money will be spread thinly across 152 highways authorities. It will also mostly fund the cheaper slow-charge points, especially as the Government will cover only up to 75% of the cost. Can the Minister tell us how popular the new fund is proving to be?
If the Government are serious about promoting plug-in vehicles—and I think they are—they could do more to create a genuinely national network of quick-charge points on motorways and main roads, perhaps by paying for the infrastructure themselves. Will the Minister consider that? I understand that an application is being made for EU funding for 74 quick-charge points on strategic roads. Will the Minister support that initiative?
There are a number of other issues to consider. First, can the electricity network cope if there is a significant increase in demand for plug-in vehicles? Is it worthwhile promoting plug-in vehicles if the electricity they use is mostly generated by fossil fuels? Will an increase in the number of quiet plug-in vehicles make our roads less safe because pedestrians and cyclists cannot hear them approach? Can the UK become a world leader in the production of plug-in vehicles and their components?
In conclusion, the Committee broadly supports the Government’s aim of kick-starting a market for plug-in vehicles, to help to achieve carbon reduction targets and to support a fledgling domestic industry. In some ways, however, the actions have not been strong enough, although I am sure that the intent is strong. For example, we have ample numbers of slow-charge points in some parts of the country but none in others, and there are far too few quick-charge points to provide for plug-in vehicles to travel long distances. The Government could take further action in that area. We have also questioned whether it is appropriate to focus the plug-in car grant on the domestic market, when persuading the public sector to convert its vehicles from conventional fuel to electric would be more cost-effective.
I commend the Government on their actions in trying to kick-start a market, but policy on supporting ultra-low emission vehicles in general, and the plugged-in car scheme in particular, should be strengthened. I look forward to hearing the Government’s proposals.
Andrew Selous (South West Bedfordshire) (Con)
It is a pleasure to serve under your chairmanship, Mr Robertson. I called for a debate on ultra-low emission vehicles on 10 May 2011, and we had an interesting hour-and-a-half Westminster Hall debate at that time—to which the Minister who is here today replied—so it is good to be back here discussing this really important issue, to see what progress has been made, and to encourage the Government to keep on going in the direction in which they have started out.
There are four powerful reasons why the issue is tremendously important. The Chair of the Transport Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman), has already mentioned the first: the need to tackle climate change. If we are to have green electricity, ultra-low emission vehicles and electric cars in particular have a significant role to play in addressing climate change. Secondly, the economic potential is huge. Having the new apprentices, the young men and women who will have to learn to build the cars, service them and keep them on the road, and maintain the infrastructure and spread it out, gives the possibility of hundreds of thousands of extra jobs for our constituents across the country.
Thirdly, producing our own green electricity helps us deal with energy security, which is a big issue that this country faces. Lastly, and probably the reason that our constituents would most support, is the genuine potential for lowering the cost of motoring. We must recognise that owning a car and putting diesel or petrol in it is becoming a rich woman or man’s game. I am distinctly uneasy about that because for many people a car is a means to earn a living, take their children to school and get to hospitals and doctors, because public transport is not always available as and when they want it. This issue matters enormously.
We have made a good start and, to be fair to the Opposition, I think that a good start was made under the previous Government. I am reassured by the commitment I have seen from the Department for Transport, from this Minister, from the Department for Business, Innovation and Skills, and also from the Treasury, given what we heard in this year’s Budget. I think that we have cross-party consensus, which is good because we are talking about something that requires long-term investment, and the people who will be putting the money in need to know that, whatever happens with the future government of our country, both sides of the House share a commitment to take the matter forward.
Nevertheless, I ask the Minister: are we being ambitious enough for Britain? If we look back through our economic history, there are many instances when things have been invented and created in this country and then the commercial exploitation has gone overseas. There is a worry that that might happen, with other European countries and certainly with the far east. It is quite possible that a country such as China could decide to invest significantly in ultra-low emission vehicles, seeing it as an economic game changer. I want the components, the vehicles and the batteries to be made in this country to a significant degree; I do not just want to be importing them from overseas.
We have heard about production in Sunderland, and I was a little concerned by what the Chair of the Select Committee said about recent reports of slightly lower numbers of the Nissan Leaf being made in the factory there. I have driven the Leaf around my constituency. It is a very nice car. It is a good size—I think that both you and I, Mr Robertson, could get into it, which is reassuring. I want to see many more Leaf cars on our roads. I have also driven the Vauxhall Ampera. It was brought here, to New Palace Yard, and I and several Members who are keen on the subject drove it over Westminster bridge and Lambeth bridge and back to the Palace of Westminster—without crashing it, I am pleased to say. That car drives extremely nicely, too, with very good acceleration. It looks nice on the road; it is a desirable car. We are not talking about antiquated technology or cars for geeks; these are cars that we all, I think, would be proud to have on our driveways.
The USA is investing some $2.4 billion in supporting the next generation of electric vehicles, and in China a company called BYD—which I think stands for “build your dreams”—is investing significantly in new battery technology. Interestingly, or perhaps ominously as far as the UK is concerned, Warren Buffett has apparently taken a 10% stake in the company, so if his past investment record is anything to go by, it will be a great success. Elsewhere around the world, Israel plans to have a transport sector that is completely oil-free by 2020—the Chair of the Select Committee probably takes a particular interest in that—and Denmark is very advanced and intends to move forward significantly in this area.
The hon. Lady mentioned the price of electric vehicles, which is a significant issue because, to be honest, they are not cheap at the moment. She mentioned a figure of £20,000 or so, even after the Government’s generous £5,000 discount. That is a lot of money—I have never spent £20,000 on a car—and of course there is no second-hand market for electric vehicles. I bought the car I currently drive for £6,000 second hand, but people cannot buy a second-hand electric vehicle for that amount of money.
My question to the Minister—if he answers only one of my questions, I would appreciate it if it was this one—is: when does he believe it will become an economically rational decision for a motorist watching the pennies to buy an electric vehicle? I believe that moment will come, because although petrol and diesel prices are now dipping a bit, in the longer term they will sadly go only one way, which is up. There will come a point at which it is economically rational to decide to buy and run an electric car, because it will be cheaper to do so, despite the up-front investment of buying it and the cost of keeping it on the road. When that moment comes, there will be a large change, because hundreds of thousands and possibly millions of people will say, “Right, for my next car I want an electric vehicle. I want cheaper, cleaner motoring.” Above all, I want us to be ready for that moment, and not importing foreign components and cars when it comes.
My constituency of South West Bedfordshire had no electric charging points in May 2011. The Minister may remember that I pursued him about that. We were due to have some, but we had a few teething problems getting them. Since our last debate on this subject, I have unveiled electric charging points in Leighton Buzzard and Dunstable in my constituency. To be honest—we must always be as honest as possible in this place—great use has not yet been made of them. I am not surprised about that, because there are still very few electric vehicles on the road. There is a Nissan garage in Dunstable, which will sell more and more Leafs, and Vauxhall is extremely strong in my area, with a factory in neighbouring Luton, and I hope that local Vauxhall showrooms will try to sell the Ampera. I can see that there will be increased usage, and I hope that such electric charging points will be used. We of course need more of them, but some are being rolled out. The Government are doing the right things: there are increasing numbers of them in car parks at visitor attractions and motorway service stations.
Not many people realise that an 80% recharge is possible in about half an hour. People think that going somewhere means that they will have to wait for hours and hours to recharge their car, which will not be worth it. The average family might easily stop at a motorway service station for 20 minutes—by the time they go in, use the facilities, buy a cup of coffee and get everyone back in the car—so being there for only another 10 minutes to get an 80% recharge in order to continue their journey will transform what electric vehicles can do. People will be able to make longer journeys without having inconveniently long pauses.
In conclusion, it is good to have the Minister here, but I just want to hold his feet to the fire, in a sense, by saying that I really think that the issue matters for our country, constituents and economy in respect of climate change. As I have said, we have missed great economic opportunities in the past, so I urge him, after his good start, to keep on pushing the policy very hard. It has support right at the top of Government, as we saw in the recent Budget. The opportunities are huge: people have spoken of a $2 trillion market, and the United Kingdom’s share of that market really matters for the well-being and prosperity of this country. That is why I think that the issue is important and why I am here this afternoon. I look forward to the Minister’s response.
Iain Stewart (Milton Keynes South) (Con)
It is a pleasure to serve under your chairmanship again, Mr Robertson.
It is also a pleasure to follow my hon. Friend and constituency neighbour, the Member for South West Bedfordshire (Andrew Selous), who gave a very good introduction to the need for the decarbonisation of transport for environmental, energy, security and economic reasons. I will not try to better his explanation, but I have some concerns about how we can best deliver that in the context of electric vehicles. There is certainly a role for an electric vehicle market, but I am not sure that it will evolve in the way that the Government or other parties—there is some consensus across parties—hope, and I trust that hon. Members will bear with me while I set out my rationale for that view.
The first obstacle to the significant extension of electric car ownership is the high cost, as has been mentioned. Even with the generous discount available, the capital sum involved is still large. Currently, a like-for-like comparison between an electric car and a petrol or diesel one is a no-brainer, unless people happen to be wealthy enough to afford the premium. The usual trend is that a new technological product is initially extremely expensive and then, as the technology improves and more people take it up, the price drops. When plasma screen televisions were first introduced, the cost ran into thousands of pounds, but the price has now come right down and they are available for most people to buy.
I am not as certain as my hon. Friend that we will easily reach a tipping point at which the cost of electric vehicles will come down and make them a rational purchase choice for many consumers. My concerns about why we will not get there are largely technical, but are also from the point of view of convenience. At the moment, the range of an electric car is about 100 miles maximum, but that can be significantly reduced by use of the air conditioning, the radio and all the other gadgets that we increasingly take for granted in cars. Apart from in a very domestic market, that is a big inhibitor: people will not have the confidence to buy such a car for regular journeys to other parts of the country for business or holidays. Even half an hour, for an 80% recharge, is a significant addition of time to a business journey. That is one reason why there will be a difficulty—I am not saying that it is impossible—in getting consumer certainty and confidence.
Andrew Selous
I accept what my hon. Friend is saying. He is making some fair points, but does he accept that there might well be significant improvements in battery technology—for example, with the use of graphene—that would transform those issues?
Iain Stewart
My hon. Friend makes a good point. I hope that we reach that point, but I am not yet convinced that the technology is there to deliver that step change. It may come. I am in no way an expert on these matters, but from all my discussions with manufacturers—the Nissan Leaf was developed at Cranfield, which is close to both our constituencies—I did not get a sense that there would be a radical shift in range immediately. It may come, and I hope it does.
My other concern relates to the domestic consumer and their confidence in running an electric car. Not everyone can plan their daily journeys with great confidence. We might have our regular commute from home to work and back again, and that is within the range of the car, but then we have to pick up kids from sports activities or do an extra shop. We can suddenly add to our daily journey in all sorts of ways. Until we get to the point where the recharging of an electric car is as convenient as going into a petrol station to fill up, in terms of time and availability, we will not get that step change in consumer demand.
We have lots of charging points in Milton Keynes, but drivers can never be certain that those spaces will be free. They could be left stranded if they are not near a plug-in point to be able to recharge their car. If consumer confidence does not improve, I fear that we will not get the sort of demand that will reduce the unit cost of the car. We might be locked into that difficult cycle, which is why I fear that we will not get a huge increase in numbers in privately owned electric cars.
Andrew Selous
I take my hon. Friend’s point about the length of time that it can take to charge a battery, although perhaps not having to shell out £85 might compensate for that in quite some significant way. May I ask him about the technology developed by Better Place, which can literally swap over batteries in less than a minute? At least that is quick and would perhaps answer the issue that my hon. Friend quite properly raises.
Iain Stewart
If that could be delivered, I would be absolutely delighted, but I have not seen any evidence that that is a practical solution. If my hon. Friend has evidence to the contrary, I would be interested to see it. I have outlined what I fear the barriers are; they are not insurmountable but a challenge none the less.
I see a better future for electric cars in the fleet and hire market. My initial thoughts on that came from our Rail 2020 Select Committee inquiry. On a European visit, we met with Dutch state railways, which gave us a presentation on an integrated transport system with smart ticketing technology that involved rail, bus and increasingly hire of electric vehicles in city centres, and it is now heavily promoting that. We have a real opportunity in this country for the development of electric cars. They are not cars that people will personally own, but they could be hired on a very short-term basis for 30 minutes or an hour or for a day or a couple of days. By shifting the responsibility for recharging from the individual driver and user to the fleet company or hire company, we would be able to remove much of the uncertainty, which I fear will prohibit people from purchasing the cars themselves. It would also help in the siting of charging points. Local authorities could work with the hire companies and whoever owns the fleet to strategically position points so that the cars are dealt with in an efficient way. It would also address the fear that was mentioned by the hon. Member for Liverpool, Riverside (Mrs Ellman) about the potential overload on the electricity system if the pattern was that people come home from work and plug in their car.
Mr Robertson, you might recall that at about this time last year, you and I attended a conference in Copenhagen with European transport and environment committees. One concern expressed was that the demand from electric cars might be so great that the only way to spread the load would be to introduce price limits and controls to discourage people from charging their vehicles at particular times, which defeats the whole object of the system.
By having more of the recharging done by fleet or hire companies, we would be able to stagger the recharging of cars in a more uniform way and avoid the overload that could potentially happen if the consumer pattern was to start charging at 6.30 in the evening. It would also help with the planning of some of the issues of standardisation that the Select Committee has identified.
A better rate of decarbonisation in privately owned cars will be achieved through the development of hybrid car technology. The body weights of motor vehicles are increasingly coming down: a number of manufacturers that I have talked to have high ambitions of delivering carbon savings by developing not wholly electric cars but hybrid and lighter vehicles. That, I feel, is the biggest potential saving, but there is a role for electric cars as well.
Before the Government commit too much money in going down one route of providing plug-in places and all the other infrastructure, I urge them to take a step back and assess whether there are other ways in which we can more effectively see an increase in electric vehicles.
Finally, let me make one separate point, which the hon. Member for Liverpool, Riverside briefly mentioned, and it neatly bridges in to the second debate on road safety. Having very quiet or near silent cars on the roads poses a potential danger for pedestrians, especially for blind and partially sighted people. The Guide Dogs for the Blind Association is running an effective campaign on that, and wants a noise gadget to be introduced so that electric cars can be heard by visually impaired people.
As part of the Select Committee’s inquiry into disabled access to transport, with Guide Dogs for the Blind I took a bus journey blindfolded. Losing the power of sight is an incredibly scary experience. The purpose of the ride was to investigate audio announcements on buses, but when I was at the side of the road, I became very dependent on hearing cars. If they become so quiet that they cannot be properly heard, it could cause a real danger.
There is perhaps a market in creating different noises for cars. One could buy a little run-about car that sounds like an Aston Martin. My hon. Friend the Member for South West Bedfordshire talked about developing new technologies; I have just suggested one, and as Aston Martin is a very good employer in Milton Keynes, I heartily recommend it. Perhaps we could return to that issue of road safety in the second debate. I urge the Government to consider the matter.
Yvonne Fovargue (Makerfield) (Lab)
It is a pleasure to serve under your chairmanship, Mr Robertson. I welcome this crucial debate, because, as we have heard from everyone who has spoken, it is vital that we reduce carbon emissions for the sake of all our futures, and that we accept that plug-in cars have a central role in achieving that goal. The Transport Committee clearly recognises that, and its excellent recent report is an important step forward.
The Government have claimed to be the “greenest ever” on some occasions, but sometimes the facts tell a different story. In 2011, they set out their vision for reducing carbon emissions from cars and vans using technologies other than internal combustion engines. In their Carbon Plan, they said that by 2050 almost every car and van would be an ultra-low emission vehicle. The way forward, we were rightly told, was to encourage demand for plug-in vehicles by providing financial incentives for consumers to buy these cars, and by providing funding for an infrastructure for vehicle charging that was publicly available.
So far, so good, but then there were the initiatives and the Select Committee has examined these. Purchasers can apply for a car grant of 25% of the cost of a plug-in car, up to a ceiling of £5,000, while funding has been provided for the installation of electric charge points in eight pilot areas. However, we have to consider the effect of these initiatives, and whether we are actually on course for that brave new world.
What we see is rather less than a comprehensive plan. Instead, there is a series of piecemeal and—as we have heard from Government Members—cautious actions that are unlikely to create the kind of demand for plug-in vehicles that is necessary if we are to take a major step forward. We are moving forward, but at a snail’s pace.
As the Committee’s report recognises, consumer demand for these vehicles has increased, but it remains relatively low; it is about 1%. Yet by 2015 we are told that the Government expect that we will
“see tens of thousands of plug-in vehicles on the roads in the UK”,
and hundreds of thousands by 2030. Judging by the numbers that we are seeing at the moment, I am not sure that we are actually on track.
The truth is that the grant for the vehicles has not had the effect that it should have had. As we have heard—I think from everybody who has spoken—part of the problem is that plug-in cars are more expensive than petrol or diesel models, and there is evidence to suggest that the grants are being used by affluent families to buy a second car, but those families are still using their petrol or diesel cars on a daily basis.
We need to bring down the cost of electric cars, because I think that we have won the argument that they are cheaper to run and offer the potential for huge savings across their lifetime. However, as we have heard, winning that argument is of little use if the average motorist simply cannot afford the up-front cost of these vehicles. We have heard from the hon. Member for Milton Keynes South (Iain Stewart) that there are some solutions to this problem, perhaps by looking at the network of hire vehicles.
When Labour were last in power, we provided £2.3 billion of assistance for the automobile industry during the recession, which was aimed at promoting research and development in new low-carbon vehicles. It also included helping companies such as Jaguar Land Rover to access the European Investment Bank’s clean transport facility. We made a commitment to make electric vehicles more easily available to consumers, with work by the then Transport Secretary, Lord Adonis, on trial electric vehicles. In addition, £250 million was invested in making electric hybrid vehicles more affordable for consumers, and the Government should be continuing that work.
I will now discuss the infrastructure, because it is absolutely vital that there is a recharging infrastructure that offers the assurance that potential buyers of plug-in cars understandably want that they will be able to recharge their car wherever they are. I understand that people with plug-in cars mostly recharge at home, but without the insurance that it is possible for people to recharge wherever they are, more people will not take up the offer of electric vehicles. People have to be confident that the structure is in place to allow them to make long journeys or take significant diversions without worrying whether they can get back home again.
The coalition agreement committed the Government to developing a national recharging network of publicly available charge points, but there is little evidence that the public actually believe that that network will be created. As the Committee’s report says, the Government appear to have spent £11 million on providing infrastructure that currently benefits only a handful of vehicle owners, while the National Chargepoint Registry does not even show the location of the majority of charge points installed with public funds, which does not instil public confidence. I accept that there has not been full evaluation of the pilot charging schemes in the eight selected areas. However, as a car owner in Wigan, when I see that Manchester has no charge points at all, that does not encourage me to buy a plug-in car to make that journey.
The simple fact is that there just are not enough charging points. It is a real worry that greater progress is not being made, and there are real doubts about whether the Government are treating this issue with the urgency that is required to ensure that even their own claims will be achieved.
As we heard from my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), the Government have done too little to inform the public of what is happening. Dr Berkeley from Coventry university told the Select Committee that
“the Government could do more to stimulate demand, particularly in terms of public awareness and public education”.
Indeed, one of the recommendations of the Committee’s report, which the Government need to consider more seriously, is that the Government must publicise the support and infrastructure that is available. There is no reason why the demand for plug-in vehicles should not take off, but it will do so only if the Government get firmly behind the project.
I accept that this is a bit of a “chicken and egg” problem, up to a point. People will not buy the plug-in cars if they are not sure that the infrastructure is there, and there is a reluctance to provide the infrastructure unless the demand is proven to exist. However, the Government can break that impasse. As the Committee’s report says, the Government should not sit back and hope that increased demand simply manifests itself. The Department for Transport should set milestones to make sure that its plug-in vehicle policy is effective, and it should take the lead in providing data on the location of charge points so that the public can actually see where they can charge their vehicles and can plan their journeys adequately.
In a wider sense, the Government also need to consider whether they are doing enough to help the automobile industry to make the changes. It is really pleasing that Nissan is building its electric car, the Leaf, in Sunderland, but it is disappointing that it has downgraded its estimates of production. We need to encourage Nissan and other companies in every way we can. Is the automobile industry putting sufficient investment into improving the efficiency of conventional petrol and diesel vehicles? Can we encourage it further to invest in British industry? I would like to hear the Minister’s views on those subjects because, as the hon. Member for South West Bedfordshire (Andrew Selous) said, it is important that Britain’s car industry takes the lead in this sector, so that it becomes revitalised.
We recognised in government that a step change was needed to move away from our dependence on oil, so we embraced and incentivised ultra-low carbon alternatives such as electric vehicles. Of the 20% of our total emissions that originate from our roads, 15% to 16% of them are from cars. If we can make it affordable for more people to use electric vehicles, that has the potential to make a significant impact on emissions. For the most part, the Government are looking in the right direction, but they seem to be in danger of stalling.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
First, I congratulate the hon. Member for Liverpool, Riverside (Mrs Ellman), the Chair of the Transport Committee, on securing this debate and on the way that she presented her case. I will do my best to respond to the points that have been made, but without causing those interested in road safety to be here for a fruitless exercise.
I also thank other Members who have contributed to the debate, especially my hon. Friends the Members for South West Bedfordshire (Andrew Selous) and for Milton Keynes South (Iain Stewart). The hon. Member for South West Bedfordshire in particular has been a strong advocate of electric vehicles ever since I have been a Minister and no doubt for a long time before that.
Let me be quite clear that the Government is fully behind the drive towards low-carbon vehicles, both because it is environmentally sensible—in terms of cutting our carbon emissions—and because it represents a significant opportunity for British industry and British jobs to get ahead. I assure all Members that we are focused on that drive. There is close work between the Department for Transport, the Department for Business, Innovation and Skills and the Treasury. The Chair of the Select Committee rightly referred to the measures taken in the recent Budget, which are a good example of how Departments work together for a common purpose, and send long-term signals that this is where we want to go in terms of our transport objectives. As always, I will say at this point that creating growth and cutting carbon are two sides of the same coin; the commitment that we have made as a Government to the roll-out of electric and low-carbon vehicles is a precise example of that.
We are making significant progress. The 2011 Carbon Plan laid out how the Government intends to tackle rising greenhouse gas emissions, and new car emissions are outperforming the progress that was expected. We are on track to meet the 2020 indicator target of 95 grams of carbon dioxide per kilometre. As Members will know, there is also a 2020 target in place for vans, which is 147 grams of CO2 per kilometre. I am reasonably confident that that target will also be met.
Stricter emissions targets are stimulating the shift to ultra-low emission vehicles, as well as improving the performance of standard, traditional or normal—if we can call them “normal”—vehicles. We are determined to create the right conditions and infrastructure for the development of an early market for ULEVs. We have committed £400 million so far in this Parliament to that end. This has resulted in the provision of more than 4,000 charge points nationwide, through the eight plugged-in places, with 70% of those being publicly accessible. I am delighted that the private sector has responded with its own charge points. We are now seeing a huge increase in the numbers available to the public at large.
Andrew Selous
I was surprised to hear the contribution from the Opposition Benches just now about there being no charging points in Manchester, one of our great northern cities. Will the Minister say whether that is because of the Government or because of Manchester, or are there plans to change that?
Norman Baker
That information is incorrect. There are 29 charge points installed to date in Manchester and 58 are to be installed later this year. I am grateful to my hon. Friend for allowing me to put that correction on the record.
As has been mentioned, the plug-in car grant was launched in 2011 and extended to vans in 2012. To the end of March, we have received almost 4,000 claims for these grants. We hear some doom-mongers in the press in particular, and one or two in Parliament, who suggest that this is somehow a terrible result. It is not. A graph can be plotted for any new product, for example, a DVD—or, in the past, video—recorder, showing what happens when a new product is put on the market. There is naturally a slow upturn, leading to a sharp increase. We are perfectly content that the roll-out of electric vehicles is not dissimilar to that of any other innovative product launched in the past.
I agree that we need to do what we can to encourage the market for such vehicles. I agree with the Chair of the Committee that it is important to identify the potential for fleet buyers. We are doing that, not least through our work with the Energy Saving Trust, with which, as Minister, I agree a programme of work each year. One of its clear targets is to encourage the take-up by fleet purchasers of low-carbon vehicles. That is one way in which we will stimulate the market. Doing that will bring down the unit cost and will help, generally, to increase the number of cars that are sold.
Andrew Selous
Some of my constituents work in the Luton van factory, making the excellent, award-winning Vauxhall Vivaro van. I have often spoken to Vauxhall about whether it has any plans to bring in an electric vehicle. Will the Minister update us on what recent conversations he has had with UK commercial vehicle manufacturers about the potential for making electric commercial vehicles here in the UK?
Norman Baker
I am happy to provide my hon. Friend with details about that. We are in regular contact with manufacturers in the country to encourage them to pursue that matter further. In respect of that particular manufacturer, I will exercise my brain cells to find out whether anything comes to me during this part of the debate, to enable him to have a fuller answer.
It was suggested that these are merely second cars for rich people, but that is not so. Some 73% of the so-called second cars have taken up the grant for business use, so business is embracing low-carbon cars. That is the predominant purchasing market at present.
We are in the process of updating the “Making the connection” infrastructure strategy and looking to restate the rationale for policy in this area, and this debate helps, as does the Committee’s thoughtful report. As this strategy develops, I will be limited in what I can say about what it will contain. However, we are aiming to publish it in early summer and hope to be able to provide an in-depth analysis of our programmes to date and use this, and robust evidence from other key stakeholders, to set out a pathway to the mass adoption of ULEVs in the UK.
We are currently talking—we always do; it will not be a surprise—to automotive manufacturers, infrastructure providers and energy providers, because there is an issue about the grid. We are also talking to our colleagues at the Department of Energy and Climate Change, trade associations representing the motorcycle sector, other Departments, and so on. That is not an exhaustive list, but I hope it gives hon. Members confidence that we are engaging cross-departmentally and across industry, with all relevant parties, to ensure that we are getting the best possible future for ULEVs.
I think we are getting the policy right. The start of Nissan Leaf production in Sunderland is proof of this. Of course, it is not just that. The BMW 8 engine is to be produced in the UK; the batteries are now being produced, helped by the significant investment in research and development, which the Government has brought forward.
We have the potential to achieve—I agree with my hon. Friend the Member for South West Bedfordshire—and we must be ambitious for Britain in this area. We must ensure that we become the focal point for the development of ULEVs. We are on the way to doing that, certainly as far as the European dimension is concerned, by getting in early, with clear direction from Government. Industry has said to the Government that it welcomes the clear, direct steer from us, giving long-term certainty about the direction of travel. To be fair to the Opposition, all three parties have embraced this agenda, giving certainty to industry beyond particular Parliaments. It is important that that stays as it is. We want more auto manufacturers.
Another point about the number of vehicles sold is that there is a limited number of vehicles on the market at the moment. That will change rapidly, with a new range of vehicles coming along shortly, giving far more choice to the consumer and the business user as to which vehicle they purchase for their particular needs. That, as much as anything else, will lead to an upturn in sales.
I will now try to answer questions asked by hon. Members. The national charge point registry was mentioned by the Committee Chair in her opening contribution. It is a requirement under both plugged-in places and the new national grant scheme that all publicly accessible charge points funded by the Government must be registered with the national charge point registry. Good progress has been made in adding data to the NCR. There are currently 3,085 points on the register.
Yvonne Fovargue
Would it be a good idea to inform the people who run the websites of the availability and where the charge points are? When I researched—I presume my hon. Friend the Member for Liverpool, Riverside went to the same website—no charge points were listed in Manchester, apart from one that was a private charge point owned by the Citroën garage.
Norman Baker
I am surprised to hear the hon. Lady say that. We will certainly look into that, because we want to ensure that as much information is available as possible. We will take that point on board and see whether it is correct. If it is, we will draw it to the attention of those who can help correct it. The information needs to be available to the public at large.
I have mentioned Nissan’s production. The Chair of the Select Committee mentioned local authorities. I hope that she has seen the announcement by the Secretary of State, which was issued subsequent to her Committee’s report being finalised, but which does mention help for local authorities, including an £11 million fund to help install on-street charging for residents who have, or have ordered, a plug-in vehicle but do not have off-street parking. Authorities can apply for 75% of the costs of installing a charge point. That is a pretty generous contribution. It should not be too high, because if it were 100%, people would ask for charge points without any intention of using them. There has to be a buy-in on both sides and 75% is about right for the contribution made.
It was suggested that £11 million would not go far enough. Let us see what the response from local authorities is. If we are overwhelmed by local authorities that respond positively, we will reconsider within the spending envelope for the budget covering this area. However, I think that that is a pretty reasonable start. It goes along with the £13.5 million for home owners—a 75% grant for them, as well—to have a domestic charge point installed, and the £9 million to fund the installation of charge points at railway stations. That is a useful initiative, because it enables people to get to the station in the morning—it encourages them to use the train, by the way, which is also lower carbon—and charge the car during the day. It need not be a rapid charge, either. They can then have confidence that, when they come back in the evening, the car is ready to drive home, fully charged. That is a good initiative and I look forward to train companies taking us up on that generous offer.
We are allocating £3 million to support the installation of charge points on the Government and wider public estate to ensure that we are doing what we can, as a Government, to lead the way on this matter and to send a clear signal that this is right for us and right for the public at large, and all those who would be interested in running vehicles in future. I hope that addresses the point on the public sector raised by the Chair of the Select Committee.
The hon. Lady also mentioned the TEN-T rapid charge bid, which we have supported. She also referred to the impact on the grid, and our view is that, if demand for electricity is properly managed with the use of smart meters and dynamic tariffs, the grid can support a relatively high number of plug-in vehicles without the need to build extra power stations. In fact, electric vehicles may also provide a way to capture and store electricity produced at night from renewable sources such as wind power, so they could actually help the electricity mix. Clearly, those are matters in which DECC is interested, and it is considering them in conjunction with the Department for Transport. As she would expect, Departments are working together on that.
On taxation policy, the hon. Lady was kind enough to refer to the recent change introduced by the Chancellor in his Budget, which is a welcome step and gives long-term confidence. In fact, it is a clear example of the Government responding to business: businesses said what they want, and the Government listened and delivered what they asked for. That will give confidence to manufacturers and purchasers of such vehicles in the years ahead.
The hon. Lady and my hon. Friend the Member for Milton Keynes South asked about quiet vehicles. There is an issue with whether visually impaired people are more at risk if they cannot hear particular vehicles. I am advised that, above 20 mph or so, the tyre noise is sufficient for them to identify that a vehicle is moving, but there is an issue with low-speed vehicles. The European Union is debating whether there should be a mandatory requirement for a noise to be added. I am not sure whether my colleagues in the Department for Environment, Food and Rural Affairs would appreciate an Aston Martin noise being added to a small vehicle, but there is a decision to be taken on whether adding a noise should be mandatory or simply voluntary. Those discussions are ongoing. There are also ongoing international discussions on whether that should be addressed internationally. Clearly, an international solution would generally be a good thing.
My hon. Friend the Member for South West Bedfordshire correctly identified that, if these electric vehicles are rolled out, they could lower the cost of motoring, as well as making motoring cleaner environmentally. He also asked one question that he said I had to answer, which was on when it will be economically rational to buy an electric vehicle. I am afraid that I do not have a date in mind, and it would be rather foolish of me to give him a date. What I can say is that it depends on a whole range of factors, including the oil price, the take-up of fleet buyers and everything else, but I am quite clear that I share his view. At some point in the not too distant future it will become more sensible economically, apart from anything else, to purchase an electric vehicle rather than a traditional petrol-driven vehicle. I hope those days are not too far away.
I welcome the interesting suggestion of my hon. Friend the Member for Milton Keynes South that cars might be available for hire, which would take away some of the uncertainty that people have, and it may fit in with people’s lifestyles to be able to do that for short journeys in particular circumstances. We are, I think, already working on something similar with car clubs so that they can partner local authorities and train operators in funding such possibilities.
Concern was raised about the possibility of electric vehicles running out and leaving people stranded, which I accept is a genuine concern for consumers. It is worth pointing out that such vehicles have a range of 100 miles, or less if the air conditioning is on, for example. In the UK, 99% of journeys are 100 miles or less, so the chance of someone thrashing their car and running out somewhere is, helpfully, quite remote. As battery technology improves, that will become even less of a risk.
Finally, I hope the hon. Member for Makerfield (Yvonne Fovargue) will forgive me for saying this, but her contributions since being appointed Opposition spokesman have tended to be formed of two things: how the previous Government got everything right, and how all the things we are doing are wrong. Having spent 13 years in opposition, and perhaps having more experience of making such speeches, I would say that sometimes giving the Government credit for what it is doing means that the Government listens more when it is told that it is getting something wrong.
I think I have answered most of the hon. Lady’s points. Lots more cars are coming onto the market. She says that the grant has not had the effect it should have had. Yes, it has, and it will have more effect when we have more cars and more choice for consumers, as we will very shortly. I agree that we need to invest in British industry, which is what we are doing. The Government is on track and has a good record on electric vehicles, which in due course will be good for the economy and the environment.
Mrs Ellman
I am encouraged by the Minister’s response, and I look forward to receiving reports on further progress.