Diesel Vehicle Scrappage Scheme

Dan Poulter Excerpts

Wednesday 19th April 2017 Westminster Hall

[Neil Parish]

I think that the right hon. Gentleman has started his speech already. The figure I can give him is that in the hotspots in our inner cities, some 60% of the nitric oxide comes from transport. It is quite difficult to break that down and say how much comes from buses, taxes, lorries, delivery vans and cars, but there is no doubt that tackling the private car, particularly in those spots, will help to make a real difference in reducing NOx emissions. Transport is a particular issue, as is the older diesel engine. We cannot ignore what is going on; we need to take action.

Motorists were encouraged to switch to diesel through changes to the vehicle taxation system. We now know that that was a policy mistake. The uptake of diesel cars rocketed. The proportion of diesel vehicles on British roads increased from 20% in 2005 to 37.8% in 2015. That was a deliberate Government policy. Between 2005 and 2015, we did see cleaner diesel vehicles, but naturally they still give off particulates and NOx.

In turn, the number of extra diesel vehicles has caused a host of air quality problems. Diesel engines emit a higher level of nitrogen oxides. Those gases cause or worsen health conditions such as asthma and bronchitis and even increase the risk of heart attacks and strokes. They are linked to tens of thousands of premature deaths in Britain every year.

As a result, the Select Committee on Environment, Food and Rural Affairs, which I chair, branded poor air quality a “public health emergency” in our recent report to the Government. Four in 10 local authorities breached legal nitrogen dioxide limits last year. That shocking statistic shows the scale of the problem.

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

My hon. Friend is right to highlight the fact that many diesel vehicles give off six to eight times or even more nitrogen oxide compared with petrol equivalents, but in that context does he agree that although it is commendable that Governments have focused on carbon reduction targets, and that may be the driver behind this policy, good environmental policy is also about looking at the other pollutant effects of cars and particularly diesel, and that the push towards electric cars may well be an important part of the long-term solution?

[Neil Parish]

I very much agree, because I think that any scrappage scheme must be very much linked to electric vehicles and certainly hybrid vehicles. I see little point in converting people from diesel back to petrol, especially if we use taxpayers’ money to do that.

--- Later in debate ---

[Neil Parish]

That is always the problem. Naturally, in order to buy a new car, people often need credit. I suppose the argument is that if a certain amount of support is available for a new vehicle, people will not need to borrow quite as much credit to get that vehicle. I understand what the hon. Gentleman says, but we have to balance that with the fact that we need to improve air quality dramatically. That is why a scheme should perhaps be particularly targeted towards our inner city.

What I was talking about could include a public transport ticket, a car club membership, a rail season ticket or cleaner transport such as a new bicycle. A scrappage scheme may not necessarily be just about people changing their cars. I could do with a new bicycle to come in from Battersea every morning—it would be ideal. The scheme would work in a similar way to the pollution reduction voucher scheme operating in southern California. The whole idea of this morning’s debate is to think slightly outside the box. The scheme also has a potential to provide a substantial boost to the UK’s emerging electric vehicle market.

Secondly, the scheme would be means-tested. I do not want a scrappage scheme becoming a subsidy entirely for the middle classes. Households should not just be able to trade in multiple diesels for a cash subsidy. Instead, the Government should consider targeting a scrappage scheme at poorer households or those earning less than 60% of the median UK household income in particular.

[Dr Poulter]

My hon. Friend is kind to give way again. I congratulate him—as I should have done earlier—on securing this important debate. As he has outlined, one of the challenges is making sure that the incentives support lower-income families. Does he agree that we will need to learn lessons from past incentives that failed to do so, such as the green deal, if we are to make the scheme effective and help people in the poorer parts of our cities?

[Neil Parish]

I am sure that the Government, especially the Treasury, will be looking at this issue particularly closely, first because the best use of taxpayers’ cash is to target those who most need it and secondly because it may be possible to widen the scrappage scheme while ensuring that those on lower incomes receive the most support. There are ways of tailoring the scrappage scheme to do exactly what we want, which is to get older diesels out and to help those, particularly those on lower incomes, who cannot otherwise afford to do so.

--- Later in debate ---

[Mr John Spellar (Warley) (Lab)]

I will depart slightly from the prevailing tenor of this discussion. I declare an interest, as one of the 11.7 million drivers of a diesel vehicle—in fact, I am a long-standing driver of a diesel vehicle—and as a Member of Parliament who represents one of the poorest areas of the country, but one that is at the heart of the British motor industry.

One of the things that I found slightly disturbing about the contribution by the hon. Member for Tiverton and Honiton (Neil Parish), who is the Chairman of the Environment, Food and Rural Affairs Committee, who is someone I hold in high regard, was about the cost of this scheme. When I asked him about costs, he just talked about the cost of converting an individual vehicle. There was no mention of what the overall cost to the Exchequer would be, nor about how we would deal with the infrastructure cost. For example, he talked about gas vehicles, but what would be the cost of creating a gas infrastructure across the country? Part of the essence of any scheme must be a national infrastructure to back it up, otherwise it would be exceedingly unattractive to individual motorists, notwithstanding the fact that, for buses and major truck fleets for example, it might make an important contribution.

One thing I found interesting was when the hon. Gentleman talked about fines. I was really surprised that he showed so little confidence in the ability of his Prime Minister to negotiate an effective Brexit that he thinks the EU will still be in a position to fine us.

[Dr Poulter]

The right hon. Gentleman is making an important point about cost, but many car manufacturers have a global market, so much of the innovation, particularly in the electric and hybrid car market, has already been achieved, because other countries have different regimes for taxing cars and providing incentives. That will reduce the cost of the roll-out of electric cars in the UK, which will be very helpful to us.

[Mr Spellar]

I am not entirely sure I follow that. I will break it down into two areas. One is about infrastructure cost. Whatever contributions have been made by the Toyota car company, for example, in creating a very successful hybrid vehicle, that does not alter the fact that people will need an infrastructure to charge up those vehicles. Although the hon. Member for Tiverton and Honiton, who introduced this debate, may well be able to plug in his vehicle on his country estate, he may have noticed that in urban areas such as mine there is very tight terraced housing and a lot of high-rise flats—and an increasing number, by the way, of apartments in our urban areas. I would be interested if he could tell us how people will be able to charge their vehicles, what the infrastructure cost will be and what Treasury contribution will be required. A decision may have to be made, but at the very least people need to know what the overall cost will be.