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Baroness Thomas of Walliswood: My Lords, I am delighted to hear the Minister's Answer which recognises that there was a gap in the guidance. Will the noble Baroness tell us when the revised version will be published and what its effect will be? The noble Baroness's experience in local government is similar to mine. Does she agree that the rational and excellent working relationship between officers in local government, in particular transport authorities, is of value and should not be wasted? Will the noble Baroness confirm that, as part of an integrated transport policy, local authorities must do the same as national authorities and sing to the same tune?
Baroness Farrington of Ribbleton: My Lords, I am reading! I fully agree with the noble Baroness that it is extremely important to pay tribute to the work of officers. She asked when there would be final guidance on local transport plans. We intend to produce revised guidance early in the spring, and final guidance towards the end of the year once we have had a chance to look at the provisional plans submitted in the summer. We have listened carefully to local authority representations, made through the Local Government Association, about timing and authorities have been asked to produce provisional five-year plans by July 1999. Authorities will then roll their plans on by one year and submit full plans for the subsequent four years.
Baroness Farrington of Ribbleton: My Lords, I am not able to give that percentage figure as a whole. I shall be delighted to write to the noble Lord giving such figures as are available. I assume that he refers to the whole of the UK and it will take time to collate information from Northern Ireland, Scotland and Wales as well as England.
Lord McIntosh of Haringey: My Lords, the Government are not in favour of introducing new taxes on domestic fuel and power. With regard to business, the Government are considering the recommendations of the report of the noble Lord, Lord Marshall, on The role of economic instruments and the business use of energy in the context of their wider strategy on climate change.
Lord Taverne: My Lords, in addition to considering the very valuable recommendations of the Marshall Report, will the Minister note the findings of an authoritative article in the November issue of Fiscal Studies, which I am sure he peruses avidly from cover to cover? It demonstrates that if the proceeds of a carbon tax, or other energy taxes, were used to reduce employment taxes there would be a significant increase in GDP, employment and the disposable income of all social groups. Will the Minister draw those findings to the attention of the Treasury?
Lord McIntosh of Haringey: My Lords, I believe that the noble Lord is hinting obliquely that carbon taxes as applied to domestic households are regressive in tax terms and that the Institute of Fiscal Studies is suggesting ways in which that regressive nature of such taxes could be reversed. It is a useful suggestion and I will indeed draw it to the attention of the Treasury.
The Countess of Mar: My Lords, perhaps I, too, may make a useful suggestion. If a carbon tax were levied could part of it be ring-fenced in order to make a contribution to the planting of trees on marginal land in this country? Trees are known to absorb carbon, they are beautiful and they serve a useful function.
Lord McIntosh of Haringey: My Lords, I agree that that is a useful suggestion. We are being most constructive this afternoon. However, I am not sure whether the question is intended to refer to carbon tax across the board; in other words, including domestic households. If, like us, the noble Countess is looking principally at the different taxes for business on fuel and
Lord Dixon-Smith: My Lords, a carbon tax is a concept with which the House will instinctively have sympathy. Of course, it is a novel idea and still capable of a great deal of development. May I invite the Minister to explain clearly the distinction between a carbon tax and a fuel duty?
I understand the Minister's argument about the need to distinguish between taxing business and the domestic sector. Bearing in mind that about 30 per cent. of the nation's energy demand comes from the domestic sector, does he consider that the distinction is wholly appropriate? Does he also believe that a variation might have to be made bearing in mind the need for all sectors to make a contribution towards the most effective use of energy?
Lord McIntosh of Haringey: My Lords, in inviting me to give a definition, the noble Lord is inviting me to over-simplify. I must do so in order to follow his invitation. Broadly speaking, a fuel duty is intended primarily to raise money. On the other hand, presumably a carbon tax is intended to reduce emissions of carbon dioxide which are measured in millions of tonnes of carbon. It would be calculated on the basis of a million tonnes of carbon emitted into the atmosphere rather than on a fund-raising basis. I am sorry, I have forgotten the second part of the noble Lord's question.
Lord McIntosh of Haringey: My Lords, I do not entirely agree with the noble Lord's figures. Emissions from the domestic sector account for about 25 per cent. rather than 30 per cent. of the total. They are, on the whole, stable, whereas emissions from industry, which is 40 per cent. of the total, are declining. The area where emissions are rising is transport. If we are to meet the criteria as laid down, and our own obligations under the Kyoto protocol, it is clear that industry and transport will have to bear the brunt of the burden.
Lord Newby: My Lords, does the Minister agree that, given that six members of the EU already have a carbon tax and that if one were to introduce a carbon tax in this country it would be unfortunate if British industry were put at a disadvantage, this is one area in which the harmonisation of taxation across the EU could be helpful in achieving a major public policy goal; namely, achieving our targets under the Kyoto protocol.
Lord McIntosh of Haringey: My Lords, I do not accept the noble Lord's premise or his conclusion. Yes, it is true that six countries in the EU--mainly Scandinavian countries--have a carbon tax. However,
Viscount Mersey: My Lords, given that the Government are anti-global warming, how do they justify the moratorium on combined cycle gas turbine power stations and the continuation of coal-fired power stations, the latter of which emit more carbon?
Lord McIntosh of Haringey: My Lords, there is no single solution which will meet all possible objectives. The moratorium on the use of gas for non-premium uses, to which the noble Viscount is referring, cannot be continued for ever. The disruption of our sources of energy which has resulted from the precipitate rush to gas-fired power stations is dangerous. For that reason, we called for a moratorium and are thinking carefully about alternatives.
Lord Peston: My Lords, I accept my noble friend's argument that a carbon tax or a tax on energy used by households may well be regressive. However, is he convinced that that is a decisive argument? It would be true to say that all sorts of efficiency-raising measures may be regressive, but why do we have an income tax and a social security system and then worry about indirect taxes when it comes to regression? Surely we could offset this simply through income tax and the social security system if efficiency gains resulted as well.
Lord McIntosh of Haringey: My Lords, my noble friend uses the careful word "decisive". I do not say it is an overwhelming argument, but the Government's decision to reduce VAT on domestic use of fuel and power to 5 per cent. was a change which benefited all households and not just those who pay income tax. My noble friend's alternative would not apply to the poorest households, and for that reason I insist that we are against regressive taxation.
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