Diesel Vehicle Scrappage Scheme

Andrew Selous Excerpts

Wednesday 19th April 2017 Westminster Hall

[Neil Parish]

Yes. My hon. Friend makes a very good point. The idea behind the scrappage scheme is that it will not only help with air quality but provide some recompense for people, in that those who were moved towards diesel will get a carrot as well as a stick. A stick, in the form of a £12.50 charge, will be applied here in London in 2019. I do not necessarily disagree with it, but a poorer family, who may not be able to afford another car, do need some help. A scheme such as the one under discussion is part of the balance that must be struck. As I said, people were encouraged down the route of diesel. We also have to get over a certain amount of scepticism among the public. They will be saying, “For years you were saying, ‘Drive diesels.’ Now you say, ‘Don’t drive diesels; drive hybrids and electric cars.’” That is absolutely right, but we have to explain exactly why we are going down that route, and a scrappage scheme would help to ease the pain.

[Andrew Selous (South West Bedfordshire) (Con)]

Will my hon. Friend give way one last time?

[Neil Parish]

I certainly will to my hon. Friend.

[Andrew Selous]

My hon. Friend is being unbelievably generous to us, and we must not carry on trespassing on his generosity. So far he has not mentioned gas. Like him I am a huge fan of electric vehicles, but does he accept that for heavy goods vehicles, refuse collection vehicles and so on, gas-powered vehicles could provide an important interim stepping stone, given that at the moment electric cannot shift that weight of vehicle in an economic fashion?

[Neil Parish]

My hon. Friend is absolutely right. The conversion to gas can reduce the particulates back to about 60% to 70% of what they were previously, so a big gain is to be had there. I also understand that most lorries would have to carry their full capacity load weight in batteries in order to drive themselves, so at the moment the electric lorry is not an option. We will probably build towards some hybrids in the future. We also have to look at taxis; we want electric taxis, but for those that cannot become electric in the first instance we should perhaps convert them to gas and then to electric. It is the same with delivery vans and other vehicles. Part of our lifestyle these days is that we order a lot online and find a lot of vans going round. This is about a whole combination of those things.

--- Later in debate ---

[Neil Parish]

I know that the Minister has had some strong discussions with Volkswagen. It is not just Volkswagen; car manuals often give a figure for miles per gallon and then a true figure that is about two-thirds of the ideal figure. They will say that the car does 60 mpg when it really does 45 mpg or 40 mpg, so there has been a certain amount of deception there. I also think that companies such as Volkswagen could buy themselves some public esteem by helping to support a scheme for moving towards electric vehicles. Not only should the Government talk to Volkswagen and other vehicle manufacturers; it would be good for those companies, which have manufactured so many diesels, to say, “We can help to convert people away from diesel.” The hon. Gentleman makes a good point.

[Andrew Selous]

Further to the point about Volkswagen, does my hon. Friend agree that there has also been a loss of tax revenue and that the Government should seek to get it back from Volkswagen and others? We taxed these vehicles believing that they were much lower-emission than they really were.

[Neil Parish]

My hon. Friend raises a good point. It is not just that people have paid less tax because they and the Government believed that their vehicle was emitting less. Those people were also sold vehicles that did not achieve the emissions levels that the manufacturer said they did, which raises the question of whether not only the Government but the individual motorists who bought those cars are entitled to some compensation. I suspect that some cases will end up in the courts, and it will be interesting to see what the courts have to say about them.

The Government should particularly consider targeting a scrappage scheme at poorer households and those that earn less than 60% of the median UK household income. They could taper support, with lower-income households entitled to a higher level of support for exchanging their vehicles.

My third proposal for a new scrappage scheme is that it should be targeted. I would limit it to the 5.6 million diesel cars on British roads that were registered before 2005, which are on Euro standards 1, 2, 3 and 4 and have higher NOx levels of at least 0.25 mg per km. This would complement current clean air zone plans to charge vehicles of Euro 4 standard and below, as well as the London T-Charge that will begin this October. A scrappage scheme would give diesel owners the chance to replace their older, dirtier vehicles before clean air zone charging is implemented, which is quite important.

Another option would be to geographically target the scheme at this country’s pollution hotspots. The think tank IPPR—the Institute for Public Policy Research—has estimated that there are around 900,000 Euro 4 or older diesel vehicles in the 16 top pollution hotspots in the country. By creating a targeted scrappage scheme, the Government could help to remove more than half the dirtiest vehicles from the worst polluting hotspots.

My fourth proposal relates to funding. The previous scrappage scheme in 2009 was targeted at cars that were more than 10 years old. A vehicle could be scrapped in exchange for a £2,000 discount—£1,000 from the Government and £1,000 from car manufacturers. I propose that a new scrappage scheme could follow a similar model. Funding should also be capped and time-limited, like the last scheme, which set deadlines of February 2010 or £400 million, whichever was achieved first. If the Government earmarked £500 million for the scheme, that could take nearly 10% of the 5 million dirtiest diesel vehicles off our roads. Evidence from the previous scheme shows that it was generally the oldest and therefore more polluting cars that were being replaced. Moreover, past schemes have generally brought forward investment decisions.

I know that Ministers have baulked at the costs of a scrappage scheme, but they should not be put off. It need not be an open-ended funding commitment. A targeted scheme capped at £500 million would be a real tonic to get dirty diesels off the road quickly. Even better, they would be replaced with ultra-low emission vehicles or a clean transport option. The Government still have vast air quality problems and the last thing we want is for them to end up having to pay fines. It would be better to go forward with something positive.

I will finish with two thoughts. The Secretary of State for Environment, Food and Rural Affairs has called air quality her Department’s top priority. The Secretary of State for Business, Energy and Industrial Strategy has said that electric vehicles are at the heart of the Government’s new industrial strategy. I cannot think of a policy that would better target both of those aims. A targeted, means-tested scrappage scheme in which diesel vehicles could be swapped for an ultra-low emission vehicle or a cleaner transport option should be a key weapon in the Government’s armoury for tackling air pollution. It would be the perfect complement to the new clean air zones strategy. I look forward to hearing from the Minister and other colleagues.