asked Her Majesty's Government:Whether they are still committed to a 20 per cent. reduction in greenhouse gases from the 1990 levels by 2010 and, if so, what specific contribution the Chancellor of the Exchequer made to the implementation of this objective in his recent Budget.
My Lords, the Government aim to reduce emissions to 20 per cent. below 1990 levels by 2010. Our first priority must be to ensure that we meet our share of the EU's legally binding emission reduction target agreed at Kyoto. In his Budget, the Chancellor raised road fuel duties, announced changes to company car fuel taxation, vehicle excise duty. VAT on energy saving products and a review of economic instruments to improve industrial energy use. We aim to consult this summer on all the options for our new climate change programme.
My Lords, I thank the Minister for that Answer, but does she not agree that the reduction of VAT on insulation materials applies only to work carried out under a grant-supported scheme, and that if people who are not supported by a grant wish to insulate their homes they still have to pay the full 17.5 per cent. VAT on both materials and labour? How does that contribute to the Government's objective, particularly as Belgium has reduced VAT on all insulation materials to 6 per cent.? In advance of the Budget, the Chancellor promised a "Green Budget Statement". There has been no such statement, so how can we know to what extent the benefits brought about by the Budget—there have been some—are or are not outweighed by the growth in the economic prosperity of the country?
My Lords, on the first point raised by the noble Baroness, the Chancellor cut VAT to 5 per cent. on energy-saving products which are installed with funding under certain government grant schemes. The noble Baroness is correct that it does not have universal coverage. However, that is as far as the Government believed that they could go under current EC rules on VAT, but we are exploring with our European partners the possibility of wider relief for energy-saving materials. We are taking that work forward.In terms of achievements resulting from announcements in the Chancellor's Budget, by increasing from 5 per cent. to 6 per cent. the previous government's commitment to raise annually the duty on road fuel, we shall save an additional 2.5 million tonnes of carbon emissions per year in 2010. That is a significant contribution to the 36 million tonnes of carbon which need to be saved if we are to achieve our aim of a 20 per cent. reduction. As I said, it is important that we have a wide-ranging programme to meet those targets and that is what we shall be consulting about in the summer.
My Lords, could my noble friend explain to the House to what extent this commitment will affect the future of coal-burning power stations and consequently adversely affect the future of the coal-mining industry?
My Lords, as my noble friend will be aware, the Government are currently undertaking a comprehensive review of energy sources for power generation. We have deferred decisions on power station consents until that review is completed later this year. The deferral of the decisions will not affect the UK meeting its target of returning greenhouse gas emissions to their 1990 levels by 2000. The review of energy sources is looking at all the issues, especially those relating to carbon dioxide emissions and the interrelationship with the health of the coal industry. I know that there has been a great deal of speculation about that, but I am afraid that my noble friend will have to await the outcome of the review.
My Lords, although the measures taken in the Budget are wholly desirable, does the noble Baroness agree that many more measures are required before the Government's objective can be achieved? Is she aware of the communication on the subject recently issued by the European Commission? Do the Government fully support it? When will the Government come out with their own measures to achieve that very important objective?
My Lords, I am grateful for the noble Lord's support for what has been done in the Budget. I think that I have made it clear that it was not a comprehensive programme and that we shall need to take action in a wide range of areas: improving energy efficiency in businesses and in the home; reducing emissions from transport; and increasing the proportion of electricity generated from renewables and from combined heat and power. We shall be consulting on that wide range of issues in the summer. The Commission is considering what it can do at the European level in terms of energy efficiency in relation to transport, combined heat and power and reducing and removing fossil fuel subsidies. There are a whole range of issues on which we can take action at EU level, as my right honourable friend Mr. Meacher has been discussing with EU colleagues, most recently at Chester.
My Lords, does the Minister recall that when she repeated a Statement on the Kyoto conference which dealt with the subject of this Question, greenhouse gas emissions, she made two important points: first, that at Kyoto the European Union had insisted on the development of clear rules for the provisions in the Kyoto protocol, and that they should be developed over the next two years; and, secondly, that the United Kingdom was to assume the European Union presidency at a crucial time and that over the next six months we had to agree how to share out the 8 per cent. reduction between the EU member states? What progress has been made on these issues over the past five months and what agreements have been made?
My Lords, the United Kingdom is continuing to lead international efforts to tackle climate change. As an early signal of our commitment the Deputy Prime Minister and Mr. Michael Meacher signed the Kyoto protocol in New York last week on behalf of both the United Kingdom and the European Union. We are working hard with our European partners to resolve important details such as the rules for emissions trading, and the involvement of developing countries in order to secure early ratification and implementation of the protocol. Under our presidency of the European Union we are discussing with our partners how to share between member states the EU's legally binding Kyoto target of an 8 per cent. reduction in greenhouse gases by 2008 to 2012. We hope to reach agreement in June on the UK and other member states' shares of the target. I hope the House will agree that that represents progress at an international and EU level.
My Lords, does my noble friend agree that the basic objective is to try to protect the environment, and probably one of the best ways to do that is to improve public transport? Bearing in mind the huge sums of money that the Chancellor is collecting from road users, is this issue not becoming more urgent and affordable?
My Lords, I certainly agree with my noble friend that it is very important that we give people a real choice as to how they travel since transport is the fastest-growing source of emissions at the moment. That means that we need a clean, reliable, safe and secure public transport system. That is why we have been working very hard to produce an integrated transport White Paper, which is due to be published next month. Issues relating to the funding of public transport have been the ones most commented upon in the consultation process.