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Lord Palmer: My Lords, perhaps the noble Lord would give way. We are both familiar with the town of

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Reading. Indeed, I was born there. Would the noble Lord agree that the smell of fish and chips is different from the smell of ginger nuts that for many years used to permeate through the entire town of Reading?

Lord Stoddart of Swindon: My Lords, Huntley and Palmer's ginger nuts, and indeed their breakfast biscuits, were renowned throughout the world. I am sorry that they are no longer made in Reading. Unfortunately, they are not made anywhere.

Apart from the other fuels that I have mentioned, there is electricity. In my view, that is undoubtedly the most environmentally-friendly fuel. We have not yet reached the stage when electricity can be used extensively for cars, but there are certainly possibilities for urban public transport, as has been mentioned by the noble Lord, Lord Beaumont.

I want to concentrate my remarks on public transport. I have the honour to be the president of the British Trolleybus Society and the chairman of its trustees. That is an organisation whose dedicated members have kept the interest in trolleybuses alive for many years and who have maintained and restored many trolleybuses from various parts of the country at the Sandtoft Transport Centre near Doncaster. Indeed, last year I had the privilege to re-launch a rebuilt Reading trolleybus--number 113--and I had the opportunity to drive it. I had never driven one before and it was certainly a different experience from driving my car. Noble Lords will be glad to know that I had no accidents and I managed to stop the trolleybus at the right stop. That was a good experience.

My interest in trolleybuses stems from my experience as chairman of the Reading corporation transport undertaking in the 1950s and 1960s when I came to realise that the trolleybus was a fine vehicle for urban stage carriage bus services. They are clean, fumeless, quiet, smooth riding and they have superb acceleration which is needed for stage carriage work and an efficient braking capability. Although they are silent, if someone steps out in front of a trolleybus, the driver can brake quickly because they have retroactive brakes. They are superb vehicles. They have a long life and low maintenance costs.

With such great advantages people may ask why they were discontinued. In my view, the answer is that there was enormous pressure from the oil lobby, although other factors such as lack of flexibility and frequent bunching leading to bad timekeeping, were cited as major reasons. Many of the reasons given were spurious and are certainly now capable of remedy through the application of new technology which could facilitate overtaking and better batteries that would enable trolleybuses to run off-wire for reasonable distances. In my view, technically there is no barrier to the reintroduction of the trolleybus.

As to running costs, even when oil prices were low--the noble Lord, Lord Palmer, pointed out that they are now sky high even without tax--the operating costs of trolleybuses were only marginally higher than those

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for diesel buses. With oil prices high and electricity prices lower in real terms, it is likely that costs per mile would now be in favour of trolleybuses.

It may be said that support for the trolleybus is backward looking. However, I must point out that although we, in this country, may have forgotten the trolleybus--some people under 30 have never seen one--in many countries they are an integral and an important part of the public transport system. In Europe and in many other parts of the world, the trolleybus is an essential and an integral part of their stage carriage services in towns and cities.

If many other countries operate them successfully, is it not time that we, in Britain, re-examined our attitude to them? Therefore, my plea to the Government is that they should finance research and development into electric vehicles and especially into a possible new role for the trolleybus in our public transport infrastructure. By that I mean assistance with re-installing the necessary overhead infrastructure and an accelerated change-over from diesel buses to trolleybuses or other environmentally-friendly vehicles. I believe this matter is urgent. We need to deal with the problems of motor vehicle exhaust urgently.

As the noble Lord, Lord Lucas, pointed out, there are other advantages. We would have to manufacture new trolleybuses which would create an opportunity for a new industry to be formed at a time when some industries in the automotive sector are closing.

I hope that my noble friend Lord Whitty will be able to give some encouragement to all noble Lords who have spoken and that the Government will listen to what has been said and will treat this problem as a matter of urgency.

9.6 p.m.

Lord Bradshaw: My Lords, I thank the noble Lord, Lord Dubs, for introducing this subject. I speak from some practical experience in public transport. Before the debate I inquired why compressed natural gas vehicles are not as welcome in the bus industry as they once were. In one British city there is a fleet of 11 such buses but they have turned out to be more expensive to run than was expected. Worse than that, from an engineering point of view they are complex. Their fuel tanks are so big and heavy that they cannot be fitted on double-decker buses and the view now is that their maintenance costs will be very high.

As noble Lords may know, I am a member of Oxfordshire County Council, and I was involved in the introduction of electric buses in Oxford. From an economic point of view they were almost catastrophic. Rarely were the five buses ever available. Breakdowns were frequent. A normal diesel bus would carry 25 seated and nine standing passengers, but that had to be reduced to 18 seated passengers because 4 tonnes of batteries had to be carried on the vehicle. They simply did not perform well. We must be realistic when taking decisions on which technologies it will be possible to extend economically to the bus industry.

The available evidence suggests that, at least in the short term, we should concentrate on the use of the best ultra-low sulphur diesel fuel, catalysts and

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particulate traps. Of course, new vehicles will be equipped with the best technology, but unfortunately there are weak business incentives to retrofit vehicles with systems such as particulate traps. The noble Lord, Lord Stoddart, referred to the fumes in Oxford Street. Buses should not be emitting black smoke, but certainly older buses need to be retrofitted with particulate traps.

Perhaps this is an area where the Government could help. I believe that out of the £280 million set aside in the Budget for transport, a sum of £6 million has been identified for the task of cleaning up pollution. Funding for the retrofitting of particulate traps to the newest of the older vehicles would be a good way of spending the money.

Modern engines, called Euro II engines, burn more fuel than the older engines, but they appear to offer the best way forward. As the Disability Discrimination Act comes into force and local authorities enter quality partnerships, this is likely to include a requirement to consider air quality. For that reason, I believe that we can look forward to the introduction of diesel buses with increasingly better engines that pollute far less.

In the longer term, if the Government are to put money into research, it would be much better to go one big step further into the area outlined by the noble Lord, Lord Lucas. The hydrogen fuel cell appears to offer a great many advantages. It is a plentiful fuel and one that does not produce greenhouse gases. Furthermore, it appears to be possible to build fuel cells of a reasonable size. However, a great deal of development work still needs to be done.

I take the point made earlier about picking winners, but I should be reluctant to see more money being spent on projects such as battery technology. When I joined the railway in 1959 that technology was hailed as an imminent and useful source of energy to propel trains. In reality it has advanced little over the past 40 years. I would much prefer to see the adoption of a technology that appears to have a realistic prospect of success, not only for fuelling vehicles but also for the provision of work in a new technology in which this country could take the lead.

One area of transport requires the Government's close attention. A great deal of pollution comes from old cars that are used as taxis. I suggest to the Government that a case can be made for imposing an age limit on taxis. That would be a local authority matter, but is something that could be required for local transport plans. Nowadays taxis should always be fitted with catalytic converters. Taxis spend a good deal of time with their engines idling in town centres to keep the drivers warm. That is by far the most polluting part of the cycle. Furthermore, taxis and private hire vehicles--I am referring to both types of vehicle--should have more regular emission tests than only once a year. Because they cover a much greater distance than the average private car, a strong case can be made for more frequent tests on such vehicles.

Mention has been made of electric traction. Certainly that is something for which we should aim. I, too, used to live in Reading and I very much

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regretted the departure of the trolley buses to which the noble Lord, Lord Stoddart, referred. I can remember the day of the last trolley bus in that town. It was most regrettable when they were taken out of service.

A matter that has greatly disappointed me--although I realise that I run the danger of having the Minister tell me, physician, heal yourself--is that neither in the network management statement of Railtrack nor in the calls for franchise renewal have I seen much evidence of extended electrification of the railways. That is an important point because it touches on what has been said by the noble Lord, Lord Palmer; namely, that we are already extremely dependent--and in the future will be even more dependent--on imported fossil fuels, not only for our road transport but also for our railways. This is in marked contrast to continental Europe, where a much larger percentage of the railway network has been electrified. To some extent this is a strategic issue. Not all of one's transport infrastructure should be tied to a common fuel base because then you can be held to ransom that much more easily.

Those are the points that I wished to contribute to this debate. I look forward with great interest to what the Minister has to say.

9.13 p.m.

Lord Brabazon of Tara: My Lords, I, too, am grateful to the noble Lord, Lord Dubs, for introducing this debate. I am not sure that I go as far as the noble Lord, Lord Palmer, in his description of its importance, but it has been interesting for all of us who have an interest in transport and cleaner technology.

I declare an interest as the user of a petrol-driven motorcar. Before we go any further with this debate, we should pay credit to the motor industry for the enormous advances in technology that have taken place over the past several years. They have eliminated completely the general use of leaded petrol; introduced the catalytic converter and vastly improved technology in the building of engines and cars themselves. I understand that cars now produce only 10 per cent of the pollution they did 10 or 20 years ago. In fact, some manufacturers claim that in polluted areas, that which comes out of the exhaust pipe is cleaner than that which goes in through the carburettor, though I feel that one would have to live in a fairly polluted area before that became true.

The noble Lord, Lord Stoddart, mentioned the case of Oxford Street--I, too, had it down in my notes for mention--which I gather is the single most polluted street in central London; and that has a ban on private cars. So the pollution is caused only by diesel-driven buses and taxis. Having said that, I shall be the first to regret the passing of the old Routemaster bus. I hope that whoever becomes mayor of London tomorrow will ensure that it survives. At the same time, I hope that the new mayor will ensure that those buses are re-engined with the latest technology.

Noble Lords referred to a number of different technologies available for environmentally friendly vehicles. Electricity, of course, is by far and away the

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cleanest fuel at the point of use. But one must remember that that electricity has to be made somewhere. So one may be shifting the pollution from one place to another. Also, those vehicles suffer from a lack of power, performance and range.

The noble Lord, Lord Stoddart of Swindon, referred to trolley buses. I can assure him that I am old enough to remember trolley buses in London. As far as I can remember, the problem was that the trolley would come unstuck from the electricity supply above. The driver would have to come round and rehook it up at the top; meantime an enormous jam would have formed behind. But if one could find the kind of trolley bus which could survive on its own for at least a limited distance, that may be a step forward. To give one anecdote, the noble Lord, Lord Stoddart, said that they were in use in various different countries. I visited Ulaanbaatar in Mongolia some years ago when I was a Minister in the Foreign Office. They used electricity-powered trolley buses which were extremely clean. The only problem was that that city was naturally prone to smog and the power station was only two miles up the road. Whenever there were smoggy conditions, the whole city was covered in the smoke from the old-fashioned coal power station, so any benefit to the population was immediately lost. I am not saying that that means that we should not look into that avenue for the future.

In relation to gas, I declare a past honorary interest as president of the Natural Gas Vehicle Association. I was disappointed to hear what the noble Lord, Lord Bradshaw, said, although I have not really kept up with progress. I read somewhere with great excitement that there was going to be a doubling of the number of outlets for compressed natural gas, which sounded good until one read that it meant a rise from 30 to 60 over the whole country. It is one of those times when the use of percentages tends to mislead.

There are problems with the lack of infrastructure, but liquefied petroleum gas can be useful for depot-based fleets. Those vehicles have another advantage which I do not believe has been mentioned this evening, in that they can be much quieter than conventional diesel-driven vehicles, particularly for something like a refuse cart which has a compressor as well as an engine. That could provide significant advantages for local residents. Of course, the problem is that, due to the lack of infrastructure, private motor cars would have to be dual-fuelled, which means that they would have to have a petrol tank as well as a gas cylinder. So the owner would lose most of the boot space.

I should like to ask the Minister a serious question on the matter. It is one to which I know that the noble Lord, Lord Dubs, referred. It relates to the granting of planning permission for LPG facilities at refuelling stations. I understand that BP Amoco had hoped to install LPG facilities at 70 filling stations this year. But, so far, I believe that it has received planning consent for only three. Similarly, Shell had a target of 100 for the year, but it has reduced that number to 60 merely because of the difficulty in getting planning

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permission. Can the Minister tell us what the Government are going to do to assist by way of giving guidance to local authorities in order to make it easier for planning permission to be granted for LPG refuelling facilities at petrol stations? I understand that this might be included in the final version of PPG13, but can the noble Lord tell us what progress has been made in that respect?

I turn now to diesel. Like other noble Lords, I, too, was briefed by Peugeot on the matter. I take a good deal of interest in what the company has to say. Diesel emits 20 per cent less greenhouse gases and 50 per cent less hydro-carbon pollutants than petrol. When we shortly have particulate filters that will completely eliminate any particulates coming out of the exhaust, that will be a very significant improvement.

However, we in this country seem to be going in completely the opposite direction to any other country in Europe. Over Europe as a whole, the number of diesel vehicles as a percentage of the total has risen from just under 25 per cent in 1998 to 28.5 per cent in 1999 and, in the first months of this year, the number rose to over 30 per cent. In Germany, France, Spain and Italy the number has risen during each of those periods but, because of the tax regime on diesel, the increase in vehicle excise duty on diesel-driven cars and the increase in duty on diesel itself, we seem to be the only country where the number is decreasing. Why are we taking this step, which seems to be completely different from steps being taken anywhere else? I am not suggesting that we should always follow the example of other European countries, but they seem to have proved a good point in this case.

Certainly, as far as the industry is concerned, Peugeot is not the only company which believes that diesel in efficient modern new vehicles--not the old buses to which I referred earlier--is a very important way forward. My noble friend Lord Lucas told us about fuel cells. I am not familiar with the technology involved, but I have heard that great developments are taking place at quite a rapid rate at present. As my noble friend said, it is a pity that such developments are taking place elsewhere and not in this country. Many people seem to regard the fuel cell as the "thing" of the future; indeed, it may well be. People seem to regard it as something worth waiting for, and that is perhaps why we have not made particular progress in other methods of reducing emissions.

I believe that the noble Lord, Lord Dubs, referred to a report on the costs and environmental benefits of modern technology that is expected shortly from the Government. Can the Minister tell the House when that report is due? I understood that it would be produced this month. It would be interesting to read its findings. I wonder whether we shall receive it as early as expected.

I conclude by saying that we on this side of the House would very much welcome progress in this respect. We would certainly make further reductions in fuel duty on cleaner fuels. I am pleased that the Government have continued with what we started on the duty on natural gas and on LPG. We would also

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introduce tax discounts for alternative environmentally friendly fuelled cars and we would grade vehicle excise duty according to the environmental standards of cars. If I may say so, the present proposals from the Government are not sophisticated enough in that direction. They seem to rely entirely on engine size rather than necessarily on fuel efficiency.

I thank the noble Lord, Lord Dubs, once more for introducing the debate and I look forward to hearing the Minister's reply.

9.25 p.m.

Lord Whitty: My Lords, I too congratulate my noble friend Lord Dubs on, and thank him for, initiating this debate, which has proved instructive. Noble Lords who are present in the Chamber have a significant interest in, and knowledge of, the areas we are discussing. Some of that knowledge is new to me and I shall consider their points on international experience and on technology.

From the Government's point of view this is a timely debate as it follows recent announcements of government initiatives to encourage cleaner vehicles and fuels. For example, changes to the company car tax system and to VED rates--the noble Lord, Lord Brabazon, mentioned this--for new cars relate to the emissions index rather than to engine size as for old cars. From next year the charges will relate to CO2 emissions. Increased funding for the Powershift programme was announced as part of the Budget package. These are all clear signals of the Government's determination to promote cleaner, more fuel efficient vehicles.

We are adopting these measures to help us tackle two of the greatest environmental challenges facing us: climate change and air quality. Road transport is the third largest source of carbon dioxide emissions--the main greenhouse gas--in the UK. Measures to reduce CO2 emissions from transport will play a central role in meeting our Kyoto targets. Conventional petrol and diesel vehicles will become more fuel efficient in coming years and will help us to meet those targets for 2010; cleaner fuelled vehicles will also play a significant part. New technologies will need to be adopted to meet the targets for 2010 and more significant greenhouse gas reductions will be needed in the future.

My noble friend Lord Stoddart referred to air quality. The problem of the quality of the air that we breathe as pedestrians or as motorists is an acute one. In support of our commitment to improve air quality, we have set tough air quality objectives to be met throughout the UK over the next few years. Our new Air Quality Strategy, published in January, identifies the major sources of air pollution in the UK and sets out a programme of action for delivering cleaner air.

As road transport is one of the major sources of air pollution, especially in urban areas, any attempt to improve air quality must consider measures to reduce pollution from transport in terms both of engine design and of fuel technology. As the noble Lord,

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Lord Brabazon, indicated, much is already being done to reduce pollution from conventional car and lorry petrol and diesel engines. They are becoming cleaner thanks largely to tougher European emissions standards and consequent efforts by motor manufacturers and also fuel processors. As a result, total emissions from transport are declining in terms of local air pollutants despite increases in road traffic.

However, even with these improvements, our air quality objectives for particles and nitrogen dioxide may not be met in some urban pollution hotspots. We need further measures to reduce emissions from road transport in those areas. Under the system of local air quality management, local authorities are required to identify any air pollution hotspots and to draw up action plans to deal with them. Cleaner fuels and technologies are measures that could further reduce vehicle emissions and deliver air quality improvements.

In terms of carbon emissions we are still faced with a situation where the growth of traffic is outpacing technological improvements. I take the point that the noble Lord, Lord Brabazon, made that we take into account not only immediate emissions and environmental effects, but also the whole life effects of that technology from manufacture through to scrapping. He also made the point that it is not only a question of emissions but noise which can bring environmental benefits if it can be reduced. Some cleaner fuels and technologies also produce significantly less noise than conventional motors. For example, gas-powered vehicles are much quieter. As the noble Lord, Lord Lucas, indicated, electric vehicles are also very quiet in operation although there are certain side costs involved which need to be addressed. The benefit from gas-powered lorries, for example, delivering in residential areas is not only as regards a reduction in pollution, but also the noise is far less disruptive to the quality of life in residential districts.

That is the background. Perhaps I may explain how the Government are encouraging the wider use of cleaner fuels and vehicles. The Powershift programme is sponsored by my department and administered by the Energy Saving Trust. It provides grants towards the additional cost of buying gas and electric vehicles. Clearly, the ability to increase the growth of the market depends on reducing the cost differential with conventional vehicles. Only vehicles offering significant emission benefits qualify for such grants. Powershift has already directly assisted the purchase of over 3,000 gas and electric vehicles.

In recognition of the continuing success of Powershift, my noble friend Lord Macdonald recently announced a substantial increase in its budget of up to £10 million in this financial year. That is three times the previous budget. It will enable Powershift to keep pace with the increasing demand for cleaner fuel vehicles.

In addition to Powershift, the Government have introduced a range of tax incentives to provide and support cleaner vehicles. Road gas fuels such as

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liquefied petroleum gas and compressed natural gas benefit from a much lower rate of duty than conventional petrol and diesel. Electric vehicles benefit from no fuel duty on electricity and lower VED at £40 a year. Gas, trucks and buses can benefit from savings of up to £1,000 a year on the annual road tax. As I have said, new, cleaner fuel cars will benefit from lower rates of VED from next year and from the reformed company tax regime from the year 2002.

So it is not just alternative fuels that benefit. We are also encouraging cleaner petrol and cleaner diesel. For example, leaded petrol was banned at the beginning of this year. Ultra-low sulphur diesel now effectively accounts for all diesel sold in the United Kingdom thanks to the fuel duty incentive. In the recent Budget the Chancellor announced a 1p. per litre incentive for ultra-low sulphur petrol to take effect from 1st October 2001. As noble Lords have said, the Government set up the cleaner vehicles task force to bring together the motor and oil industries, environmentalists and others to promote the production, purchase and use of cleaner and more efficient vehicles.

In answer to the noble Lord, Lord Brabazon, the task force's report on cleaner fuels will be published on 31st May. That will compare the performance of a range of fuel technologies and will include a series of recommendations including recommendations aimed at government, industry and users on how cleaner fuels and technologies can be used.

The work of the task force has already led to a number of new initiatives. For example, there is a £6 million programme for a new cleaner vehicles programme. That initiative is a direct response to the recommendations to reduce pollution from existing vehicles and in particular from buses and taxis. As my noble friend Lord Stoddart and the noble Lord, Lord Bradshaw, said, they are still substantial polluters. There is a slower rate of turnover of a fleet than in the car sector. Urban vehicles such as buses and taxis will benefit from that programme by fitting catalysts and particulate traps.

In addition the new Motorvate scheme arose from a task force initiative. The scheme, which will be formally launched in June, sets simple, achievable targets to ensure that we have lower CO 2 emissions.

The cleaner vehicles programme will include retrofitment of particulate traps to buses, and it will be for local authorities--or, in London, the Public Carriage Office--to take up those proposals. There are a number of technical options available.

The Government, of course, have a responsibility in relation to public sector vehicles. I am keen that government departments and agencies take up the benefit of cleaner vehicles. There are some limited success stories to mention. The Government Car Service is currently operating 33 LPG cars and is planning long-term trials of LPG vans. The DSS has taken a proactive role and is currently operating 73 LPG vehicles and intends to order a further 30 cars. Local authorities are to the fore in this area in the use

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of both LPG cars and CNG vans. The development of the use of electric vehicles is taking place in a few local authorities, notably Coventry and a consortium of London authorities.

Again in relation to conventional fuels, the noble Lord, Lord Brabazon, raised the question of the differential between petrol and diesel and the difference between ourselves and certain other countries. Certainly it is true that the motor industry is making tremendous strides in reducing harmful emissions from diesel, but emissions of particulates and oxides of nitrogen are still expected to be significantly higher compared to emissions from new petrol cars. That is why the differential is there. Nevertheless, recent developments in diesel after-treatment technologies have the potential to offer significant emission reductions, to the extent that some diesel cars could eventually have comparable emissions with clean petrol cars.

Questions were raised in relation to the infrastructure for gas vehicles. The noble Lord, Lord Brabazon, and my noble friend Lord Dubs referred to the issue of planning. I can confirm that the revised transport planning guidance (PPG13) will encourage local authorities to view planning applications for refuelling facilities much more favourably. There are now some 360 LPG refuelling points within the United Kingdom and around 30 or so CNG points, as the noble Lord, Lord Brabazon, said.

As to electric vehicles, the Government are keen to encourage their wider use. They have a lower VED rate; we offer grants under the Powershift programme; we are encouraging local authorities to use them in their fleets where the vehicles' relatively low range can be incorporated; and we are encouraging other potential users.

As to trolley buses--an issue raised by my noble friend Lord Stoddart--I, too, have nostalgic views of trolley buses despite never having lived in Reading or ever visited Ulan Bator. There is some prospect of progress in this regard, but the overall cost of trolley buses given the huge infrastructure outlay--we may have made a mistake in taking out the infrastructure in the first place, but putting it back will cost money--is likely to be higher than traditional buses with cleaner fuels and retrofitting for existing buses.

The noble Lord, Lord Lucas, raised the question of the regulation of electric vehicles. Although many of the features that apply to conventionally fuelled vehicles will apply to electric vehicles, new regulations will be required, and we are taking a proactive part in the drawing up of those regulations in Europe. As the noble Lord will know, vehicle regulations are now determined at EU level.

The noble Lord, Lord Palmer, referred to biodiesel. We certainly recognise that biodiesel is a renewable source of energy that has some major advantages over conventional mineral diesel. However, the production and distribution of biodiesel can be quite energy intensive. Unless this energy is produced from renewable sources, biodiesel cannot be considered as truly renewable. Nevertheless, we consider that it has

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potential advantages. Technology has been developed in Germany and elsewhere. Biodiesel is often considered to be carbon-neutral as the carbon absorbed by the oilseed rape when it is grown offsets the carbon emissions when biodiesel is burnt. We propose to keep under review the whole scope for rapeseed or indeed other organic crop-based fuels. For example, there are advantages with short-rotation willow coppice which are greater than those for rapeseed. There are significant areas that need further examination. The Government will undertake that.

Noble Lords have referred to fuel cells as the technology of the future. We agree that fuel cells may well be the best bet. However, we need to cover the whole range of technologies that will come into play over different timescales. An expanded Powershift programme is already supporting fuel cells and the programme contributed to the costs of the vehicle referred to in relation to Sevco and Westminster Council. We are very aware of the potential of fuel cell vehicle technology. We would hope that both research

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that the DTI, under its advanced fuel cell programme, is already supporting and, it is to be hoped, eventual production could accrue to this country.

I come now to the points raised by the noble Lord, Lord Beaumont of Whitley, in relation to the development of what I refer to as ultra-light rail options. A number of innovative systems are being promoted in this field. To develop this commercially and operationally, it would have to fit into the priorities for the local transport plan. Funds have been made available as part of the innovative public transport project with the aim of producing a prototype of an innovative public transport system. A number of bids are currently being considered. We are undertaking various small-scale research programmes in this area.

I have run out of time. This has been a fascinating debate. There are a number of potential options here. I shall study all noble Lords' comments as we look into developing further our strategy in all of these alternative fuel areas.

        House adjourned at eighteen minutes before ten o'clock.

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