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When the Liberal Democrats impose an environmental levy such as this one, we always propose offsetting measures to protect those on low incomes who have no alternative but to pay the extra tax. We ensure that the environmental measures are revenue neutral and neutral in their effect on the economy as a whole. We have done that rigorously over the years. The hon. Member for Cotswold (Mr. Clifton-Brown) was right when he intervened in the speech of the hon. Member for Bury St. Edmunds. It is important that there are offsetting measures.

The Government have proposed two offsetting measures. One is being implemented quickly. They are making available £50 million a year for rural public transport. As other hon. Members have said, £50 million goes nowhere near compensating rural motorists who will be affected by the increase of more than 20 per cent. in 12 months in fuel duty. The money being raised by the Government is in billions of pounds. Seeing that side by side with £50 million shows that the Government do not accept the principle of offsetting measures. That is a great shame.

The Government have said that they will consult on a second measure. It is not in the Finance Bill, and that is a great shame. They have said that they are minded to consult on introducing vehicle excise duty at a starting rate of £100 for the least polluting cars. I presume that that consultation will happen later this year. It is a shame that it is being delayed, because compensation delayed is not really compensation for people paying higher fuel duties now. The Red Book merely states that the Government are interested in introducing a reduced starting rate of £100. I hope that they will go much further.

The Liberal Democrats have argued for some time that vehicle excise duty should be graduated far more than by the suggestions on which the Government propose to

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consult. We should like vehicle excise duty for the smaller-engined, more fuel-efficient cars to be reduced to just £10 in order to offset the impact of higher fuel duties, especially on rural motorists who need to use their cars and have no alternative.

The Government should be taking offsetting measures first before imposing these swingeing increases. The timing is of great significance. The right hon. Member for Wells (Mr. Heathcoat-Amory) mentioned the plight of agriculture and the rural economy as a result of the level of the pound and the problems caused by the decline in the beef industry as a result of the BSE crisis. I accept that the BSE crisis is not the Government's fault. I am happy to agree that the Conservative Government failed to tackle that problem sufficiently, but it has left the rural economy in dire straits. So to impose increases in fuel duty on the rural economy when they will be most directly felt and will have the most swingeing impact--increases of more than 20 per cent. in less than 12 months--is clearly a wrong-headed policy. Liberal Democrats will support amendment No. 12 and vote against clause 7 stand part.

In spite of what some Conservative Members have said, the Government have published an environmental assessment of the measures on fuel duty and have given some details of the effect of the increases on the environment. I refer right hon. and hon. Members to page 78 of the Red Book. There is a column on the environmental impact on the reductions in nitrous oxide and various other pollutants. I cannot quite describe it from what is written because it is in scientific shorthand that I do not understand, but the bit that I do understand is where the Red Book states that the fuel duty increases will result in a


However, there is a note saying:


    "These estimates are subject to significant margins of uncertainty."

I am sure they are. [Laughter.] The Financial Secretary laughs, and she is right to do so.

The more serious point is that that is all that we have--one page; a little line on those massive increases in duty. I am afraid that that does not go anywhere near meeting the promise that the Financial Secretary made recently. Of the promise of a green book setting out the Budget's environmental consequences, she said:


In Labour's 1994 pre-election environmental policy paper "In Trust for Tomorrow", it made a commitment to a green book. We have not had it in this Budget. That is a great shame.

We are not able in this Committee to make a proper analysis of the environmental effects of the Government's measures unless the Government start meeting their pledges. So the Liberal Democrats will vote against the Government on amendment No. 12 and clause 7 stand part because the clause will have a damaging impact on the rural economy, and one that has not been offset by alternative measures. The Government have failed to put before the Committee any serious analysis of environmental impact.

Mr. Shaun Woodward (Witney): I am in favour of the amendment because I represent a rural constituency.

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There is no question but that clause 7 is punitive and cynical and shows that the Government do not understand one bit the needs of rural constituencies. That is the reason for the amendment. The Government do not understand that 75 per cent. of people in rural areas depend on their cars to go to work. They do not understand that rural people have to travel 50 per cent. further than people who live in towns, and that they depend on their cars. Cars for those people are a necessity, not a luxury.

The Government made much of the process of public consultation before the Chancellor's statement. Yet again, that reveals that they are a cynical Government with a cynical practice of public consultation. Had the Chancellor come to my constituency and taken the opportunity to consult businesses in the rural area, he would have seen a survey that we conducted of 300 small businesses. Of those 300 businesses, 97 per cent. told us that they disapproved of the increases last July. The Chancellor would also have discovered that, when asked whether they thought that a 5 or 6 per cent. increase was right, only 1 per cent. of those businesses agreed.

Mr. Leslie: Will the hon. Gentleman give way?

Mr. Woodward: I shall give way in a moment.

When they were asked whether they thought that the increases would be bad, neutral or good, 94 per cent. said that they would be bad.

Mr. Leslie: Will the hon. Gentleman give way on that point?

Mr. Woodward: The hon. Gentleman will have an opportunity in a moment.

Why have the Government imposed that increase, which will hit the elderly, poor and sick in my constituency?

Mr. Leslie: Will the hon. Gentleman give way?

Mr. Woodward: In a moment. I wish to make some progress.

My constituency contains three community hospitals--Burford, Chipping Norton and Witney. The Government, who promise great things on the health service, are to close Burford hospital. The people who use it will have to travel 11 miles to Witney hospital, and those who live in rural areas will have to pay extra money to get there. The Government propose to close 25 per cent. of Witney hospital's beds, so people will have to go on to Oxford. That is a tax that will hit the sick, the vulnerable and those who live in rural areas.

Mr. Leslie: I am grateful to the hon. Gentleman, who is so generous in giving way. He mentioned a survey, which I am sure was statistically and methodologically correct, about the opinions of rural businesses about a 6 per cent. increase in road fuel duty. Did they give an opinion about the 10 per cent. increase in road fuel duty in 1993 which was introduced by Norman Lamont, the former Chancellor?

Mr. Woodward: I am grateful to the hon. Gentleman for his question, because we made it clear that the road fuel escalator was a constructive tax, so long as the market could plan for it. The difference between the previous

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Government and this one is that this Government are cynical tax-grabbers who have introduced two increases through the road fuel escalator in 12 months and who are interested only in grabbing money from people's back pockets, front doors and back doors, and now from their car doors.

Mr. St. Aubyn: Does my hon. Friend recall that the previous Government increased petrol duty against a background of significantly falling oil prices? The Government are introducing larger increases when oil prices have bottomed out.

Mr. Woodward: My hon. Friend is exactly right, and it is interesting that the hon. Member for Shipley (Mr. Leslie) has not sought to intervene again. Perhaps he has learnt the lesson that he needs to learn.

Mr. Leslie: I listened carefully to the hon. Gentleman's point and should like an answer. Norman Lamont, the former Chancellor, increased road fuel duty by 10 per cent. in 1993. Was it useful in achieving the hon. Gentleman's objective of helping rural areas?

Mr. Woodward: I am grateful to the hon. Gentleman for asking his question again, because he clearly did not hear what my hon. Friend the Member for Guildford (Mr. St. Aubyn) said. When hon. Members intervene to make what they perceive to be clever comments, they must consider them in context. As my hon. Friend the Member for Guildford said, if Labour Members examined the overall fall in the price of oil and pump prices at petrol stations, they would realise that the Chancellor is hitting the poor, the sick and people in the countryside. The Government do not care about them.


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