Diesel Vehicle Scrappage Scheme

Lord Spellar Excerpts

Wednesday 19th April 2017 Westminster Hall

[Neil Parish (Tiverton and Honiton) (Con)]

I beg to move,

That this House has considered a diesel vehicle scrappage scheme.

It is a great pleasure to serve under your chairmanship, Mr Chope. I also have great pleasure in leading this debate. The good attendance shows the strength of feeling for implementing a diesel vehicle scrappage scheme and tackling air pollution problems. In my speech, I shall touch on why we need a scrappage scheme, outline how such a scheme would complement the Government’s new air quality plan, and suggest how systems could be designed and targeted at the dirtiest diesel engines.

Why do we need a diesel vehicle scrappage scheme? I think that everyone here knows how we got to this point. The previous Government said that diesel cars should attract less vehicle tax than petrol equivalents because of their better carbon dioxide performance, and the present Government carried on in very much the same vein.

[Mr John Spellar (Warley) (Lab)]

I thank the hon. Gentleman for saying that, because there is a narrative that this was a perverse act by the previous Government. Can he confirm that in fact it was supported by all the other parties at the time—as he has rightly conceded, the policy was continued by the present Government—because CO₂ reduction was seen as the overriding imperative?

[Neil Parish]

Heaven forbid that I should say the last Government were perverse. It was the acquired wisdom of the day that we should reduce CO₂, and diesel produced more per litre than petrol, so encouraging diesel was the obvious way to go. There were some rumblings at the time, if I remember rightly, but I have to accept that we did not change the policy when we came to power. Of course, we have now seen the new science and seen the light, and therefore need to take action on particulates and on nitrogen oxides in particular.

[Mr Spellar]

I apologise to the hon. Gentleman for intervening again, but he says that we have seen the evidence. Can he tell us the breakdown of emissions of particulates and NOx from various modes of transport, whether buses, trucks or private vehicles, and particularly as compared with other sources? I will mention a number of them—

[Mr Christopher Chope (in the Chair)]

Order. Not in an intervention, I hope.

[Mr Spellar]

Incineration, power stations and a number of others, which I will reflect on in my contribution.

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[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.

[Mr Spellar]

Will the hon. Gentleman give way?

[Neil Parish]

As long as the right hon. Gentleman makes it brief, please.

[Mr Spellar]

I thank the hon. Gentleman. The one thing that has been absent from his wide exposition over a range of transport issues is any actual costings of the changes he proposes. Has his Committee actually done any of that?

[Neil Parish]

I actually converted one of my own vehicles to gas. Usually, converting a vehicle is something like between £1,500 and £2,000, so it is not ridiculous money to convert to gas. All the bus companies and taxi firms will do all the costings and will know firmly how much it is. As I said, a certain amount of help is therefore needed to help the commercial sector to convert to the new world. Otherwise they will not do it because of the economics.

The Government have twice lost in court over their failure to tackle poor air quality. In November, the High Court forced the Government to come up with a new, better air quality plan. The draft will be published imminently—by 24 April at the latest—so we may hear something on that matter from the Minister this morning. Already, from this October, pre-2006 diesels and petrol vehicles will face a £10 charge when they enter London at peak periods. It is expected that diesel drivers will be hit hard. Separately, the Budget Red Book stated that the Government would consider appropriate tax treatment for diesel vehicles ahead of the 2017 Budget. Diesel owners who bought their vehicles in good faith are expected to be hit with higher bills.

Of course, I understand the need for tough action. These new measures are the stick to reduce diesel vehicle numbers, but what about the carrot? Where are the incentives to encourage drivers to move away from diesel? The Prime Minister recently said,

“I’m very conscious of the fact that past governments have encouraged people to buy diesel cars and we need to take that into account”.

That is where the case for a targeted diesel scrappage scheme comes in; it perfectly complements the Government’s clean air zone plans.

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[Geraint Davies (Swansea West) (Lab/Co-op)]

As I mentioned earlier, I will publish my Clean Air Bill today. I should put on record that I completely agree with the sentiments and words of the Chair of the Environment, Food and Rural Affairs Committee, the hon. Member for Tiverton and Honiton (Neil Parish). We all recognise that we have limited resources, so a targeted, capped scheme would send the right signal to consumers and producers about the future and put the focus in the right place. The electric car company Tesla, which produced just 76,000 cars last year, is worth $49 billion—$3 billion more than Ford, which produced 6.6 million cars. In other words, the marketplace is ready for these changes, and the Government need to facilitate them.

My Bill sets out a wider plan to provide a hydrogen infrastructure, an electric infrastructure and new powers for local authorities to get the evidence on localised air pollution, in order to have evidence-based restrictions and charges that protect the elderly, young people and general communities, alongside a fiscal strategy. This is a brave and sensible first step in that endeavour.

[Mr Spellar]

My hon. Friend talked about the market deciding. Which market is he talking about? Is it the bubble stock market, maybe reflecting fashionable thought, or is it the actual car market, which shows overwhelmingly that people are buying from the mainstream manufacturers?

[Geraint Davies]

Obviously, we can influence the market. More than 50% of new cars are now diesel. Margaret Thatcher knew about the problems of particulates and there was a judgment call on public health versus carbon. Since then, the problems with NOx have grown. The fact is that the amount of particulates and NOx being produced is much, much greater than people previously thought, partly because of the deception of Volkswagen and others. This is a public health catastrophe.

I will present the case for my Bill this afternoon with support from the Royal College of Physicians, the Royal College of General Practitioners and UNICEF. People will know that last year’s report by the Royal College of Physicians found that 40,000 premature deaths were due to these emissions, as well as presenting emerging evidence about foetuses suffering long-term damage and about the damage to the neurology, and general physical and mental health, of young children in urban spaces, particularly in poor areas. Those children are being poisoned, which has a disastrous impact on the rest of their lives. I am not prepared, as my right hon. Friend the Member for Warley (Mr Spellar) appears to be, just to go on with business as normal, backing the poison of the current industry, which seeks to maximise profits.

It is the function of the Government to regulate markets in the interests of the public and it is an outrage that parents are unable to protect their own children, and that—as we speak—hundreds of thousands of children are in playgrounds enjoying themselves but inadvertently inhaling poisonous fumes. We need to take action and I am glad that we are moving forward with this first step; I hope that the Government agree.

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[Mr John Spellar (Warley) (Lab)]

I will depart slightly from the prevailing tenor of this discussion. I declare an interest, as one of the 11.7 million drivers of a diesel vehicle—in fact, I am a long-standing driver of a diesel vehicle—and as a Member of Parliament who represents one of the poorest areas of the country, but one that is at the heart of the British motor industry.

One of the things that I found slightly disturbing about the contribution by the hon. Member for Tiverton and Honiton (Neil Parish), who is the Chairman of the Environment, Food and Rural Affairs Committee, who is someone I hold in high regard, was about the cost of this scheme. When I asked him about costs, he just talked about the cost of converting an individual vehicle. There was no mention of what the overall cost to the Exchequer would be, nor about how we would deal with the infrastructure cost. For example, he talked about gas vehicles, but what would be the cost of creating a gas infrastructure across the country? Part of the essence of any scheme must be a national infrastructure to back it up, otherwise it would be exceedingly unattractive to individual motorists, notwithstanding the fact that, for buses and major truck fleets for example, it might make an important contribution.

One thing I found interesting was when the hon. Gentleman talked about fines. I was really surprised that he showed so little confidence in the ability of his Prime Minister to negotiate an effective Brexit that he thinks the EU will still be in a position to fine us.

[Dr Poulter]

The right hon. Gentleman is making an important point about cost, but many car manufacturers have a global market, so much of the innovation, particularly in the electric and hybrid car market, has already been achieved, because other countries have different regimes for taxing cars and providing incentives. That will reduce the cost of the roll-out of electric cars in the UK, which will be very helpful to us.

[Mr Spellar]

I am not entirely sure I follow that. I will break it down into two areas. One is about infrastructure cost. Whatever contributions have been made by the Toyota car company, for example, in creating a very successful hybrid vehicle, that does not alter the fact that people will need an infrastructure to charge up those vehicles. Although the hon. Member for Tiverton and Honiton, who introduced this debate, may well be able to plug in his vehicle on his country estate, he may have noticed that in urban areas such as mine there is very tight terraced housing and a lot of high-rise flats—and an increasing number, by the way, of apartments in our urban areas. I would be interested if he could tell us how people will be able to charge their vehicles, what the infrastructure cost will be and what Treasury contribution will be required. A decision may have to be made, but at the very least people need to know what the overall cost will be.

[Neil Parish]

If I could just put the right hon. Gentleman right, I do not have a “country estate”; I have a farm. There is a little bit of a difference, and I was also a working farmer before I got here. Let me make that abundantly clear.

To be serious, the Government are already rolling out an infrastructure for charging points; we also want the fast charging points, so that people can charge up their cars quickly. As far as gas is concerned, there is an infrastructure out there already. A lot of garages supply liquid gas. There are probably not as many as we might need, but there is quite an infrastructure for gas out there already, so that does not need to be reinvented.

[Mr Spellar]

I think the hon. Gentleman is underplaying the position. I acknowledge the fact that he is a farmer—which is why I threw it in the way I did—but I would ask whether he and his neighbours use red diesel. There was no mention in his contribution as to whether the enormous discount on red diesel should be included in our considerations. Again, I note that there was no figure—no estimate—for how much all of this will cost.

[Geraint Davies]

The hon. Member for Tiverton and Honiton (Neil Parish) mentioned the cap of half a billion pounds for the scrappage scheme, but if the signal from the Government to the market is that having points for hydrogen and gas is the direction of travel, the market will accelerate the infrastructure provision. As has been pointed out, there is a gas and an electric infrastructure. We need to pump prime a hydrogen infrastructure and the market will invest. The old-style socialist view that everything has to be paid for by the state is not the case.

[Mr Spellar]

But we are talking about dramatic change, with 11.7 million diesel cars, let alone trucks, buses and so on. The idea that the current infrastructure or even a massively ramped-up infrastructure will be able to deal with that without major Government investment seems entirely fanciful.

[Charlie Elphicke]

In a world where there are around 30 million cars in the United Kingdom and 11,000 electric charging points, of which about 800 are fast-charging, does the right hon. Gentleman not agree that there is some way to go and that it is important to have a step change to the electric future?

[Mr Spellar]

If that is the case, I have to ask the hon. Gentleman how much that would cost and who would pay for it. One of the problems we have—I know this as a former Transport Minister—is that those who create policy, whether they are in the Department for Transport, Westminster City Council, London City Hall or even Birmingham Council House, overwhelmingly have clerical jobs by definition and travel in on public transport. Certainly in the London region, they travel overwhelmingly on rail. That is their mindset, and the mindset of many of the press lobby as well. Look how fascinated they are every time there are any problems on the railway, as compared with the situation on the roads.

If we go outside London—when I say London, I mean central London, because this applies very much to the London suburbs and the peripheral towns around London—and look at all the Government data, although there is a marginal shift at the moment, people overwhelmingly travel to work by road transport, whether by bus or in cars, which make up a significant proportion. That is how people get to work. People may fancifully say that people can get on their bike to do that, but if they are going 10 miles away to do shift work at a factory or a hospital, or if they are going to a building site carrying their tools, that is not a realistic option.

The problem is that the interests of London and the policies that affect London start to impact on the rest of the country. Even within London, there are all those builders coming in—that steady stream of vehicles travelling in on the motorways bringing in those who are constructing the city—and we are looking at significantly penalising them. That is why I asked the hon. Member for Tiverton and Honiton what actual assessment there has been of the problem, breaking it down. In his contribution, he said that there is no doubt that private vehicles contribute the bulk of the pollution. My council, Sandwell Council, did a study of the Bearwood Road only a couple of years ago. It found that buses formed 8% of the vehicles on Bearwood Road and contributed 57% of the pollutants being emitted there. It may be very sensible for him to say that we should target the problem by providing a subsidy to the bus companies—rather than taking away the subsidies from bus companies, as this Government have been doing, threatening them—and actually having a bus scrappage scheme to take the older buses out of the system. That would be a perfectly realistic way of looking at it.

[Graham Stringer]

Just before my right hon. Friend gets too carried away with making Brian Souter even richer than he already is from public subsidy, I would like to bring him back to the very sensible point he was making about infrastructure. I recently asked the Department parliamentary questions about the capacity of the electricity generating board to provide electricity if we moved over to a fully electric motorised fleet. Quite simply, we are nowhere near that capacity. The Department has not thought that through.

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[Mr Spellar]

That is absolutely right, and I thank my hon. Friend for that. I suspect that the transmission capacity, particularly locally, will be affected in the same way. Equally, we have to look at the availability of petrol if we remove a great chunk of the diesel market, which may or may not also happen in the rest of Europe. What discussions has the Minister had with his European counterparts? The duty levied on diesel there is considerably lower, which is why they have much lower diesel prices in the EU. Reference was made to the European Commission putting the UK Government on notice and our Supreme Court responding to that, but it is interesting to note that the European Commission also mentioned a whole number of other countries, including Germany, France, Spain and Italy. Is there any common factor among those countries, apart from them being the major industrial countries of the EU? I therefore find it rather strange that we are looking at a major upheaval that does not seem to be mirrored by our European counterparts without getting proper figures in an impact assessment, and at a time when we are considering the uncertainties of Brexit. Apart from one or two towns and cities in one or two countries, there seems to be no similar reaction from other countries.

Equally, there seems to be no consideration as to whether, as was rightly said earlier, we could actually have alternative fuels for many heavy goods vehicles. There is a reason why, across the whole world, goods vehicles are overwhelmingly diesel. It has to do with torque, traction and so on, and that applies to many builders’ vehicles, which are for lifting and generate power to do that. That would not be possible with an electric vehicle—certainly not with the current state of technology.

Electric vehicles may have some minor advantage when sitting in traffic, but many of those arguing for this proposal should perhaps be looking at better traffic management. With a number of cities, and particularly London, quite a bit of the congestion has been aided and abetted by the construction of cycle lanes. Boris Johnson’s cycle lanes have generated congestion in central London, as taxi drivers and others will all attest, so we need to be looking at how we can deal with the problem in its various segments. With petroleum, it is true that we can keep cracking the oil in different stages and get more petroleum out, but that adds considerably to the cost—I will come to the cost to the individual in one second, after I give way to the Chairman of the Select Committee.

[Neil Parish]

I am finding the right hon. Gentleman’s contribution very interesting, because he is going into great detail on all the problems we have, but he is then saying that bicycles are causing problems. Surely people on bicycles are not emitting any emissions at all, other than breathing in and out as they are riding along. It is no good coming out with a whole list of things that are wrong with the proposal. I would like to see a bit of a more positive approach to the whole argument.

[Mr Spellar]

As the hon. Gentleman rides in on his bike from Battersea, he may notice that the bridges across the Thames are always much more congested than they used to be. That is because there is much less road space because of the introduction of cycle lanes.

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[Mr Christopher Chope (in the Chair)]

Order. Interventions are getting longer and longer. At least one other hon. Member wishes to participate in this debate.

[Mr Spellar]

In that case, I will speed up, Mr Chope. A considerable number die as a result of air quality because of cooking with solid fuel in enclosed spaces, particularly in Africa, which is certainly something we should look at and is certainly something to do with photovoltaic and storage. Also, on the assessments and the figure of 40,000, Roger Harrabin of the BBC has said that it could be anything between a fifth or five times as much as that. It is not about cardiac arrests or even lung cancer, but about the average reduced periods of life. A real study of the data is needed, accepting that there is a problem, but that this is about scoping it.

There is also the issue of sources of generation. In coastal areas, particularly in ports, what is the contribution of shipping to the numbers of particulates? What is the contribution of diesel trains? Perhaps the Minister will explain why the Government are cutting back on some of the electrification, which will mean more diesel trains going into urban areas. What is the contribution of power stations, central heating boilers and the burning of solid fuel? Interestingly, what is the contribution, as I mentioned earlier, of urban incinerators, of which we have a large number to deal with the problems of waste? Also, what is the contribution of tar, which is believed to be considerable, particularly in terms of small particulates?

As for the scrappage question, it is all very well to say we will give somebody £1,000, but £1,000 towards what? Towards buying a new vehicle? What does that say to someone who needs his car to get to work and who has probably already seen a drop in its value of about £2,000? What does it say to people who are asset poor and who need their vehicle to get to work? If we give them £1,000, who will lend them the money to buy new vehicles? Will they buy vehicles from further up the chain? There may be answers, but figures came there none during this debate.

What about taxi drivers? Birmingham City Council is proposing a purge of diesel taxis. Taxi driving is entry-level employment for many in this country in all communities. Are we telling them we will take them off the road and put them on the dole? That is certainly not an attractive proposition for many constituents who are active in the taxi trade.

I have already mentioned the question of where people will charge their cars. Even if we have fast chargers, how many can we put through the average service station on the motorway compared with how many can fill up there? How many can we have at any other service station? What about city centre areas? I accept there is probably a lower percentage of car ownership in some of those areas, but there are still a hell of a lot of cars. How will we have a charging system on the congested urban streetscape of Britain? And what will we do in isolated and rural areas?

Mr Chope, I am aware that we want to hear from the Front-Bench spokespeople, and, as you rightly drew to my attention, one other speaker wishes to participate, so I shall end now. This is a big debate. I do not think we should move forward with disconnected local schemes or without a well-thought-out, well-costed Treasury-backed scheme. We should not rush into this. The matters are serious. They are about international competitiveness, people’s financial welfare, and, as people have rightly said, people’s health and welfare. This is a big issue. We should not go ahead on prime ministerial whim or just on what local government decides. We need a proper national debate and proper national answers.

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[The Minister of State, Department for Transport (Mr John Hayes)]

It is a pleasure to serve under your chairmanship, Mr Chope, and to speak in this debate. I have just 15 minutes to deal with this important subject —I hope it will be 15 minutes of pure joy.

Disraeli, the greatest Conservative Prime Minister, said:

“The fool wonders, the wise man asks.”

My hon. Friend the Member for Tiverton and Honiton (Neil Parish) has indeed asked a question about what he feels is an important contribution to the developing strategy on air quality, which, as he knows, I have been working on with colleagues at DEFRA and others across Government so as to put it in place in a way that is both practicable and demanding. I say practicable, because I am not in the business of penalising drivers—particularly those on modest incomes who bought their diesel vehicles in good faith. They were badly advised, largely by the previous Labour Government, as we heard from various contributors to the debate. There has been refreshing honesty in that respect today.

[Mr Spellar]

Will the Minister tell us whether he or the Conservative Opposition in any way opposed those measures at the time?

[Mr Hayes]

I can answer that question directly. The Conservatives took an entirely different approach in opposition. In our 2001 environment manifesto, the then Conservative Opposition called for a vehicle excise duty to be based on air pollution and vehicle emissions rather than just carbon dioxide. None the less, Gordon Brown went ahead with the scheme unaffected by that advice. That is the direct answer to the right hon. Gentleman’s question. Ministers do not give many direct answers, but that is a model example of one.

[Mr Spellar]

Will the Minister tell us how the Conservatives voted in Parliament on that?

[Mr Hayes]

In the short time available to me, I do not have access to Hansard, and it would absolutely wrong for me to give any information that is not pinpoint accurate. That is not my habit, Mr Chope, and it is certainly not something you would permit in this Chamber. I now need to rush on to deal adequately with the contributions that have been made to this debate.

It is absolutely clear that the prosperity of our nation and, more than that, the common good depend on our wellbeing. Closely associated with wellbeing is the health of our people—urban and rural, young and old. If we are going to promote a better Britain to fuel—if I can put it in these terms—the common good, we need to look at air quality and pollution, as that is critical to health.

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[Mr Hayes]

In recent years emissions have been a problem in particular areas—I acknowledge that clearly—and the Government are particularly keen to deal with the effects on those areas. The air quality plan will of course have a national footprint, as it is a national plan. The particularity I described was about Government setting out an appropriate and deliverable framework, and then working with localities to ensure that in the implementation of that framework all those local circumstances are put in place. That is the point that I was making about urban and rural areas and the different circumstances that apply there.

Clean air zones cover a designated area and involve a range of immediate local actions to support cities to grow while delivering sustained improvements in air quality and transition to a low-emission economy. Measures that could be implemented include the promotion of ultra-low emission vehicles; upgrading buses and taxis; promoting cycling schemes; and, in the worst cases, charging for the most polluting vehicles. In 2015 we named five cities, Birmingham, Leeds, Nottingham, Derby and Southampton, that are required to introduce a clean air zone. The Government are engaging with the relevant local authorities on the schemes’ detailed design.

Clean air zones will support the transition to a low-emission economy, but the Government are considering how to mitigate the zones’ impacts on those worst affected. I am not in the business of disadvantaging those who are already disadvantaged and in exaggerating the circumstances of those who already face tough choices and have a struggle to make their way in the world. That is not we are about and would not be the kind of fair politics that I believe in and to which this Government are committed. A fairer Britain is one that takes account of such disadvantages and we will do so in the construction and delivery of this policy.

My hon. Friend the Member for Tiverton and Honiton suggested that a means-tested scrappage scheme could address some of those issues. He emphasised the fact that his scheme would be means-tested, and he did so with a fair amount of passion. Hegel said:

“Nothing great in the world has ever been accomplished without passion”,

and my hon. Friend has displayed that very passion today. Let me be clear: I note his points and I will ensure that they are considered as part of our consultation and as part of our work. I do not think you get much better than that typically in Westminster Hall.

It is absolutely right that the Government’s clean air zone policy recognises all the challenges that have been set out by various contributors to the debate and it tackles the problems of the most polluted places by acknowledging that low-cost transport is vital to people’s opportunities and wellbeing.

[Mr Spellar]

I have a one-sentence question. How much money have the Department and the Treasury designated to deal with the problem?