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Ed Balls : What does my hon. Friend think that the green NGOs make of the fact that the Conservatives remain opposed to the climate change levy? What signal does that send about their environmental credentials?

Mark Lazarowicz: NGOs will draw a clear conclusion about the Conservatives' environmental credentials. I was about to come to the climate change levy, so I am grateful to my hon. Friend for reminding us of the Conservatives' continual failure to move an inch on the levy. They have made so many U-turns and flip-flops that it might have been easy for them to change policy on the levy, yet they remain obdurate in their refusal to do so.

Mr. Graham Stuart: Does the hon. Gentleman believe that the climate change levy, by being a tax on energy and not on carbon, is wrongly based? The Conservative party and four other parties have offered to work with the Government to tackle the biggest environmental issue facing the world, but the Government have refused. What does he think about that?

Mark Lazarowicz: I am going to come to the question of working together in a moment. The fact is that the climate change levy has led to significant reductions in carbon emissions. By 2010, it will allow the overall energy demand in the economy to be reduced by more than 6 per cent. Unless the hon. Gentleman is living on another planet, which I am sure he is not, he will at least accept that a fair element of the energy that we use originates from carbon. That is why the levy has a heavy impact on carbon emissions.
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It is not only me or the Government who say that. When I sat on the Environment, Food and Rural Affairs Committee in the last Parliament, we had an investigation into the means to tackle climate change. The various groups that came before us to give evidence did not say that the climate change levy was the wrong instrument but that it should be increased. That is why it is particularly welcome that the Chancellor said that it will be indexed so that it will be seen to have an impact on reaching our targets on CO 2 emissions.

David Taylor (North-West Leicestershire) (Lab/Co-op): There is no doubt that the Conservatives' environmental policies are incoherent and all over the place. My hon. Friend and I were fellow-members of the EFRA Committee in the last Parliament. Does he recall the evidence from representatives of the energy-intensive industries such as the construction products industries in my constituency, and brick-making, who argued that the climate change agreements have delivered the reduction in emissions? At a time of high energy prices, they would welcome some respite, but recognise that penalties are needed if CCAs are not complied with. They have a point, do they not?

Mark Lazarowicz: The two elements go together. On their present trends, the climate change levy and the climate change agreements will have a roughly similar effect in terms of a reduction of carbon emissions. They both have their role to play. Clearly, any tax can be refined and improved, but the key point is that the levy has had a significant impact on reducing emissions in the UK. Independent—not Government—research has shown that it has had a significant impact on the behaviour of businesses. Adding that fairly small, but visible, element to their costs encourages them not only to reduce their energy costs but to look at other ways of operating and improving energy overall, which has a positive effect on our carbon emission reduction targets. We must also bear it in mind that taken together, the overall effect of the reductions in energy demand and in national insurance contributions has been a reduction in costs for business as a whole. That has to be seen in the round. Elements can always be adjusted and improved, but the general direction is one that we should support.

I am genuinely puzzled by the Conservatives' refusal at least to give some qualified backing to the climate change levy. They are entitled to say that they want to see change but this is not the right one and they would do something else in future. We get one or two hints of what that might be from vague references to a carbon tax, but merely saying that that might be the answer does not take us much further, because it could be applied in many ways. We have not seen anything representing a worked-out proposal from the Conservatives—perhaps we will hear about it later in the debate—so we have no idea of what alternative they would put in place.

No doubt their conversion to the green agenda is genuine, although there may be some exceptions. However, they cannot tell us time and again that we will have to wait until the machinery—no doubt wind-powered—of Conservative think-tanks grinds out some kind of policy recommendation before they come off the
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fence on the climate change levy. Surely the right position, if they were really concerned about the issue, would be for them to say, "We don't think it's the best policy and it's not our preferred policy, but it's making a difference and having an impact. We will support it now and in the Lobby at the end of these debates on Tuesday, and in due course we will come forward with an alternative." Surely the Conservative party should not undermine a policy that has had a significant effect on reducing carbon emissions. Everyone who has an interest in the subject and knows about it realises that.

The Paymaster General (Dawn Primarolo): Perhaps my hon. Friend can reflect in his eloquent speech on the importance of the climate change levy and the contribution that it makes to reducing our carbon emissions. He will recall that, when the Government introduced the levy, the Conservative party not only opposed it but had no alternative suggestions for dealing with climate change.

Mark Lazarowicz: Indeed. Perhaps we are not much further forward but doubtless we will hear about it if such alternatives are proposed.

Mr. Ellwood : The hon. Gentleman questions the sincerity of the Conservative party's green credentials. Can the Labour party fulfil its 2001 or 2005 manifesto commitment to reduce carbon emissions?

Mark Lazarowicz: I do not question the sincerity of the Conservative party. I am prepared to accept that, for whatever reason, a change of direction has occurred. Conversion is one thing but it must be followed by specific policies if one is to make a difference and persuade the country that it is not some form of tactical, short-term change.

Our policies are moving in the right direction and they have made a significant impact. The climate change review next week will outline the other steps that we are taking to try to ensure that we reach our international and national targets.

Mr. Graham Stuart: I believe that the hon. Gentleman is genuinely committed. Unlike with so many Labour Members, I do not find it necessary to denigrate the motives of my political opponent. However, he has not mentioned that, under the Government, CO 2 we have all said that we will do that—the climate change levy has an important role to play. I am therefore disappointed and genuinely puzzled by the way in which the Conservative party will not move on the issue.

The Opposition's approach is unfortunate if we are trying to hold a serious debate on how to make progress on policy. I do not want to spend all my time on the climate change levy, but its beneficial impact on carbon
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emissions is acknowledged. If we cannot get even qualified Conservative support for it, we encourage disillusionment and cynicism outside the House, and the idea that all we do in here is talk about tackling climate change without effecting specific policies. I therefore hope that the Conservative party may yet reconsider its position.

Mr. Kevan Jones : Does my hon. Friend agree that we can now see the difference between the public statements that the Leader of the Opposition has made on climate change and what is actual Conservative policy? Where is the substance? Is it not clear from the fact that the Conservatives are not conceding on this issue that the gimmicky things that their leader has been saying over the past few weeks have no substance?

Mark Lazarowicz: I shall be more charitable than my hon. Friend. All I am saying is that I am posing questions on this issue, and that it is reasonable to expect answers from a party that claims to wish to be elected to Government at some stage in the future, although one might have doubts as to how soon that will be.

Another reason why the Conservatives' refusal to move on the climate change levy is so unfortunate is that, in the past, the right hon. Member for West Dorset and other Conservative Members who have been involved in these debates have recognised that we need a broad political consensus if Governments are to have the political space to introduce the undoubtedly radical measures that are required to tackle climate change. If we cannot get practical evidence of support for a consensus on the climate change levy, we are entitled to ask how much chance there is of getting a consensus on the wider agenda.

The Budget proposed an increase in vehicle excise duty for gas guzzlers, and I believe that that proposal has the support of the Conservatives, although I might be wrong. Some of their Back Benchers seemed to suggest that the proposed rate of duty was not high enough. Whatever their position today, however, there is no doubt that, a few years ago, such a Budget proposal would have caused uproar and resulted in all sorts of media campaigns against it. Now, however, the political atmosphere has changed, and such policies attract a positive response from the vast majority of the public, apart from a few moans and grumbles. We have yet to discover the Liberal Democrats' position on this, and I was surprised to hear some of the comments made by the hon. Member for Orkney and Shetland (Mr. Carmichael) earlier. Nevertheless, I believe that this proposal is generally accepted as the right thing to do.

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