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Mr. Miller: Given that company cars are replaced, on average, every two or three years, does not the hon. Gentleman think that the sales manager to whom he referred should be encouraging his employer—or, if he himself is in an executive position, making the decision—to shift away from using a 1.9 litre diesel to a more environmentally friendly car?

Mr. Moss: The hon. Gentleman's comments would have a little more integrity if the purpose of the tax were to bring about that shift, but we well know that it is just another stealth tax to add to the Chancellor's coffers.

As the Minister knows, old cars cause the majority of vehicle air pollution. Cars produced after 1997 emit only 4 per cent. of the hydrocarbons, 9 per cent. of the nitrogen

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oxides and 10 per cent. of the carbon monoxide emitted by a pre-1993 car. When are the Government going to do something about the real polluters? Banding VED rates to reflect the total environmental impact of cars will provide a strong, positive incentive in the tax system for people to upgrade to cleaner cars, which will significantly cut air pollution throughout the country.

Of course, the most polluting vehicles on our roads are buses and HGVs. Buses emit 68 times more nitrogen oxides and 37 times more particulates than an equivalent car. Oxford street is probably the most polluted street in the country, and there are no cars travelling on it. Even the Mayor of London has been forced to admit that his congestion tax will not reduce pollution in central London. Conservative Members would be grateful to learn what measures the Minister will take to reduce bus pollution.

The Conservative party firmly believes that transport policy should be shaped by environmental concerns, but we do not believe that an anti-car agenda, which many Labour Members are bent on, is the way forward. Many people have to use their cars because, for them, public transport is just not an option. The sensible approach would therefore be to cut taxation on greener fuels and cars, not try to tax people out of their cars. We welcome the fact that the Government have now started to get that message, and we hope that they continue to make constructive proposals to encourage greener motoring.

11.23 am

Joan Ruddock (Lewisham, Deptford): In opening the debate, my hon. Friend the Minister concentrated on cleaner fuels for transport, acknowledging the contribution of transport to climate change, which he described as the greatest environmental threat facing us. Prior to 11 September, climate change was the imperative driving the development of cleaner fuels. Air pollution and local environment degradation were obviously significant concerns, but it was the acceptance by the international community that global warming was upon us that gave the spur to low-carbon and non-carbon technologies.

After 11 September, no debate on clean fuels can ignore the security implications of current energy supplies and suppliers. Before that date, the nuclear industry was once again presenting itself as a clean technology and part of the fight against climate change. That was, of course, not true. We already have 10,000 tonnes of highly dangerous nuclear waste stored in the UK awaiting someone to find a solution to the problem of its disposal, and 500,000 tonnes of such waste are destined to be produced by existing nuclear capacity. Yesterday, my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs told the House that the cost of dealing with nuclear waste was about £85 billion, but that is as nothing compared with the obvious threat posed by terrorist action. We cannot begin to comprehend what the consequences would have been if the terrorist targets in the United States had been not the twin towers but nuclear power plants.

Our nation and our way of life are unsustainable without fuel for manufacturing, heating, transport, lighting and all public services. Today, more than ever, we cannot simply accept that it will come out of a pump or a tap or emerge at the flick of a switch. Suddenly, our

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military and environmental security have become closely interlinked and the imperative for change has rapidly accelerated.

The Government are undertaking an energy review, the preamble to which expresses their concerns about the following matters: ensuring diversity of supply, so that the UK is not dependent on one source; ensuring security of supply, because much of the UK's oil and gas comes from areas of political instability; meeting our environmental obligations to reduce CO 2 by 20 per cent. on 1990 levels by 2010 and by up to 60 per cent. by 2050; and the social consequences of high energy prices.

I do not intend, and it would be inappropriate in this debate, to set out a comprehensive response to that review, but I recommend the response made by SERA, Labour's Environment Campaign. It argues for bringing energy efficiency and combined heat and power into the mainstream of energy policy, with proper funding, a policy framework, and recognition that they contribute to all the main policy goals: competitiveness, reducing fuel poverty, increasing energy security and reducing emissions. The campaign also argues against any new nuclear power plants and is in favour of a comprehensive strategy for renewable energy. It is on those points that I wish to concentrate.

The key to the review must be diversity and security of supply. The natural assumption might be that there is some equivalence between the sectors—nuclear, coal, oil, gas and renewables—each having its place in the future, with mere shifts in the balance between them. However, there is another way for us to meet both fuel and security needs. First, we should decide once and for all that nuclear power has had its day in this country. We should spend no more time on future fantasies about nuclear power and get on with the job of dealing with the colossal output of nuclear waste. There is no economic or environmental case for new nuclear plants, and those that we have must now be regarded as a major terrorist target.

Secondly, we should ask whether we can obtain diversity and security of supply from the basket of renewable energy sources. All the evidence suggests that we can. Onshore wind, offshore wind, wave and solar energy each provide a resource sufficient to supply all the UK's power, if we choose to harness it. I acknowledge that progress has been made and that the Government have kept the promise on renewables that they made in opposition. They have increased funding, and there are incentives, but there is nothing on the scale that will enable us to meet all future energy needs from benign, clean and renewable resources.

The Minister gave us a comprehensive picture of the range of cleaner transport fuels that are available and of the incentives that the Government have provided. He accurately described what I regard as a transitional period. He is, of course, aware that all our efforts represent a constant battle. The positive reductions in emissions from each vehicle are offset by the increasing number of vehicles on the road and the fact that they are used more often. For that reason, we cannot treat transport fuels in isolation, and renewable energy sources provide the key to the future.

The potential for renewables is vast. BP has calculated that if modern solar photovoltaic technologies were applied to all appropriate roofs they would generate more

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electricity from this nation wide than we use in a single year. A recent performance and innovation unit study accepts that wind farms using only a small amount of the areas available to them and the use of available wave power could double current national demand.

Biomass power plants could balance the grid's need for constancy of supply and hydrogen fuel cells could provide the means of mass storage of energy. Hydrogen fuel cells and batteries mean that photovoltaics and other renewables will become centrally relevant to transport and oil. Hon. Members will know that hydrogen fuel can be made from water using solar and other renewable energy sources, thus completing a virtuous circle. Battery cars, chargeable from renewables, are already available. All those technologies are feasible, but they require a great leap of imagination, a real change of direction and, of course, the investment and incentives appropriate to the new imperatives.

The Government have said that they want our embryonic solar PV industry to be able to compete on a par with those of Germany and Japan. In the past year, about £16 million of grants have been allocated to that industry and more is promised from the additional £100 million for renewable energies beginning in 2002. That is just a fraction of what is available to our competitors. BP and Shell have estimated that it would take 15,000 roofs—equivalent to 30 MW a year—before manufacturing that product would be justified in the UK. Solar Century estimates that by 2004-05 the UK capacity will be only 10 MW, based on the Government's known programme. By comparison, 30 MW was obtained in the fourth year of the Japanese programme and in the second year of the German programme.

The company Solar Century has undertaken to fit 63 solar power plants, which have mainly been put on buildings around the UK in the past 18 months. It has five proposals that could transform the industry. First, it believes that the Government should support the UK's solar grant resource at a level equivalent to that of Germany and Japan. Secondly, it contends that the renewables obligation could be varied to place a solar obligation on industry for 1 per cent. of its renewable supply or 0.1 per cent. of its total supply by 2010. Thirdly, it thinks that planning authorities could be encouraged to require a proportion of PV on developments, as the Mayor of London has suggested for new buildings in the capital. Does my hon. Friend's Department plan to encourage planning authorities to require a proportion of their local and regional developments to include photovoltaics?

Solar Century's fourth proposal is to extend the Government's programme of enhanced capital allowances. Should not that be extended to photovoltaics in an effort to grow the market? Fifthly, it suggests that major oil companies could be required to spend a proportion of their profits on large-scale PV manufacturing. Once such plants were built, a self-sustaining market would emerge. My hon. Friend will be aware that the recent huge profits made by oil companies have led to calls for windfall taxes. Does he agree that a better solution would be for the Government actively to incentivise companies to invest a percentage of those profits in the manufacture of renewable energies?

I welcome my hon. Friend's announcement that in November the Government will publish a paper on powering future vehicles. That is long overdue. Perhaps he agrees that hydrogen fuel cells offer the best solution

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for the automotive industry. If so, does he believe that the development of photovoltaics should be accelerated as a critical route to the generation of hydrogen fuel?

The automotive industry, the oil industry and the green movement agree on two fundamental points: that the long-term use of petrol and diesel is not a sustainable option and that the ultimate fuel solution is hydrogen generated from renewable energy. The international community rightly perceives two enormous threats to global security and the environment—climate change and international terrorism. Our national energy review could not come at a more critical time. The right decisions taken now could transform our energy supply by the middle of the century, contributing not only to the international good but to the improvement of our environment, domestic comforts and security. It is an opportunity that we must not miss.

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