Diesel Vehicle Scrappage Scheme

Neil Parish Excerpts

Wednesday 19th April 2017 Westminster Hall

[Neil Parish (Tiverton and Honiton) (Con)]

I beg to move,

That this House has considered a diesel vehicle scrappage scheme.

It is a great pleasure to serve under your chairmanship, Mr Chope. I also have great pleasure in leading this debate. The good attendance shows the strength of feeling for implementing a diesel vehicle scrappage scheme and tackling air pollution problems. In my speech, I shall touch on why we need a scrappage scheme, outline how such a scheme would complement the Government’s new air quality plan, and suggest how systems could be designed and targeted at the dirtiest diesel engines.

Why do we need a diesel vehicle scrappage scheme? I think that everyone here knows how we got to this point. The previous Government said that diesel cars should attract less vehicle tax than petrol equivalents because of their better carbon dioxide performance, and the present Government carried on in very much the same vein.

[Mr John Spellar (Warley) (Lab)]

I thank the hon. Gentleman for saying that, because there is a narrative that this was a perverse act by the previous Government. Can he confirm that in fact it was supported by all the other parties at the time—as he has rightly conceded, the policy was continued by the present Government—because CO₂ reduction was seen as the overriding imperative?

[Neil Parish]

Heaven forbid that I should say the last Government were perverse. It was the acquired wisdom of the day that we should reduce CO₂, and diesel produced more per litre than petrol, so encouraging diesel was the obvious way to go. There were some rumblings at the time, if I remember rightly, but I have to accept that we did not change the policy when we came to power. Of course, we have now seen the new science and seen the light, and therefore need to take action on particulates and on nitrogen oxides in particular.

[Mr Spellar]

I apologise to the hon. Gentleman for intervening again, but he says that we have seen the evidence. Can he tell us the breakdown of emissions of particulates and NOx from various modes of transport, whether buses, trucks or private vehicles, and particularly as compared with other sources? I will mention a number of them—

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[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.

[Geraint Davies (Swansea West) (Lab/Co-op)]

I support everything that the hon. Gentleman is saying. He knows that today I am publishing my Clean Air Bill, which deals with wider mapping to provide infrastructure for electric and hydrogen, more powers for local authorities and a broader fiscal strategy to confront the escalating number of people dying because of diesel emissions. Will he lend that Bill his support—I know he has put his name to it—today?

[Neil Parish]

The hon. Gentleman’s Bill is a good idea, because we all have to work together on air quality to lengthen the lives of many of our constituents and certainly of many people in the hotspots. That is where electric vehicles, the charging points, taxis, buses and all those things come in. We need to look at hydrogen cars; we need to look at a whole range of vehicles, and perhaps sometimes we need to take people out of vehicles altogether. Norman Tebbit’s “On your bike” may have a whole new meaning. If people go to work on a bike, that is good for the environment as well as for getting to work.

[David Simpson (Upper Bann) (DUP)]

rose—

[Neil Parish]

I will give way to the hon. Gentleman, who is a member of the Select Committee.

[David Simpson]

I thank our esteemed Chairman of the EFRA Committee for giving way. Let us say that a diesel vehicle scrappage scheme is implemented. Does he envisage that it will be rolled out across the whole United Kingdom, or will it be left to the devolved nations to sort it out themselves?

[Neil Parish]

That is probably a decision for my right hon. Friend the Minister and the Government. We have such an esteemed Minister here this morning. As I was his Parliamentary Private Secretary at one stage, I especially know what an esteemed Minister he is and I expect to hear some very good and detailed policy from him in our debate this morning, so I look forward to his response. I suspect that it will be down to the devolved nations to roll out such a scheme, but I also suspect that devolved nations will be looking for a little cash to do that.

[Charlie Elphicke (Dover) (Con)]

I congratulate my hon. Friend on securing this important debate. Does he agree that many drivers of diesel cars will feel that they were encouraged to buy those cars, but now they face the prospect of local authorities seeking to fleece them for taxes in order to raise money to plug their own funding gaps, and that they will feel that that is deeply unfair?

[Neil Parish]

Yes. My hon. Friend makes a very good point. The idea behind the scrappage scheme is that it will not only help with air quality but provide some recompense for people, in that those who were moved towards diesel will get a carrot as well as a stick. A stick, in the form of a £12.50 charge, will be applied here in London in 2019. I do not necessarily disagree with it, but a poorer family, who may not be able to afford another car, do need some help. A scheme such as the one under discussion is part of the balance that must be struck. As I said, people were encouraged down the route of diesel. We also have to get over a certain amount of scepticism among the public. They will be saying, “For years you were saying, ‘Drive diesels.’ Now you say, ‘Don’t drive diesels; drive hybrids and electric cars.’” That is absolutely right, but we have to explain exactly why we are going down that route, and a scrappage scheme would help to ease the pain.

[Andrew Selous (South West Bedfordshire) (Con)]

Will my hon. Friend give way one last time?

[Neil Parish]

I certainly will to my hon. Friend.

[Andrew Selous]

My hon. Friend is being unbelievably generous to us, and we must not carry on trespassing on his generosity. So far he has not mentioned gas. Like him I am a huge fan of electric vehicles, but does he accept that for heavy goods vehicles, refuse collection vehicles and so on, gas-powered vehicles could provide an important interim stepping stone, given that at the moment electric cannot shift that weight of vehicle in an economic fashion?

[Neil Parish]

My hon. Friend is absolutely right. The conversion to gas can reduce the particulates back to about 60% to 70% of what they were previously, so a big gain is to be had there. I also understand that most lorries would have to carry their full capacity load weight in batteries in order to drive themselves, so at the moment the electric lorry is not an option. We will probably build towards some hybrids in the future. We also have to look at taxis; we want electric taxis, but for those that cannot become electric in the first instance we should perhaps convert them to gas and then to electric. It is the same with delivery vans and other vehicles. Part of our lifestyle these days is that we order a lot online and find a lot of vans going round. This is about a whole combination of those things.

[Mr Spellar]

Will the hon. Gentleman give way?

[Neil Parish]

As long as the right hon. Gentleman makes it brief, please.

[Mr Spellar]

I thank the hon. Gentleman. The one thing that has been absent from his wide exposition over a range of transport issues is any actual costings of the changes he proposes. Has his Committee actually done any of that?

[Neil Parish]

I actually converted one of my own vehicles to gas. Usually, converting a vehicle is something like between £1,500 and £2,000, so it is not ridiculous money to convert to gas. All the bus companies and taxi firms will do all the costings and will know firmly how much it is. As I said, a certain amount of help is therefore needed to help the commercial sector to convert to the new world. Otherwise they will not do it because of the economics.

The Government have twice lost in court over their failure to tackle poor air quality. In November, the High Court forced the Government to come up with a new, better air quality plan. The draft will be published imminently—by 24 April at the latest—so we may hear something on that matter from the Minister this morning. Already, from this October, pre-2006 diesels and petrol vehicles will face a £10 charge when they enter London at peak periods. It is expected that diesel drivers will be hit hard. Separately, the Budget Red Book stated that the Government would consider appropriate tax treatment for diesel vehicles ahead of the 2017 Budget. Diesel owners who bought their vehicles in good faith are expected to be hit with higher bills.

Of course, I understand the need for tough action. These new measures are the stick to reduce diesel vehicle numbers, but what about the carrot? Where are the incentives to encourage drivers to move away from diesel? The Prime Minister recently said,

“I’m very conscious of the fact that past governments have encouraged people to buy diesel cars and we need to take that into account”.

That is where the case for a targeted diesel scrappage scheme comes in; it perfectly complements the Government’s clean air zone plans.

[Graham Stringer (Blackley and Broughton) (Lab)]

I am grateful to the hon. Gentleman, who is being extremely generous with his time. Given that most of the concentration of nitrous oxide, nitrogen dioxide and particulates is in urban areas, does he think that in any scrappage scheme a priority should be given to people living in urban areas? It seems slightly generous and pointless to support people who own diesels in the middle of North Yorkshire, say.

[Neil Parish]

The hon. Gentleman raises an interesting point. Yes, priority does need to be given to the inner city, because that is where we are particularly trying to improve the quality—in the hotspots of poor air quality. There is perhaps also a need to help beyond the inner city, because—this is the point I have been making—people bought their diesels in good faith. Certainly, there should be a targeted approach. One of the problems with the previous scrappage scheme was that it was to boost car sales at that time—it is a lovely position for middle England to decide, “Let’s change our car.” In some ways, there may be a need to target partly by income as well. If we are not careful, a lot of the people who we most want to trade in their older diesels may be those who can least afford a new car. That is perhaps beyond my pay grade, but it is not beyond the pay grade of the Minister, who will reply in a minute.

[The Minister of State, Department for Transport (Mr John Hayes)]

Almost nothing is.

[Neil Parish]

Good; I look forward to the Minister’s words of wisdom. The hon. Member for Blackley and Broughton (Graham Stringer) raises an interesting point—it is the hotspots in particular that we need to sort.

Road transport still counted for 34% of the UK’s NOx emissions in 2015, and the rate of reduction from the sector has slowed down because of the increased contribution from diesel vehicles. Turning to the Government’s plans, I was therefore disappointed that a scrappage scheme was not announced at the Budget. Of course, we are a little hopeful that something may be announced very soon. The Transport Secretary stated on “The Andrew Marr Show” in February that the Government were considering a scrappage scheme, but there have been no further announcements. I know that there are concerns about the costs of any scheme, and that is why it should be targeted and proportionate. It can be a key weapon in the Government’s armoury in tackling air pollution problems.

What is more, a scrappage scheme is very popular with the public. A recent survey of over 20,000 AA members showed that seven in 10 backed the policy, rising to three quarters among young people. A separate survey published by the think-tank Bright Blue just two weeks ago showed that 67% of Conservatives backed a scrappage scheme. Ministers, this is a policy with significant public support, especially as we move, dare I say it, towards a general election—that was not in my speech.

What would a scrappage scheme look like? First, it would mean replacement by ultra-low emission vehicles. Any potential scrappage scheme should have a stringent condition on the replacement vehicle. It should mandate users to swap their vehicles for an ultra-low emission vehicle or other forms of transport.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I thank the hon. Gentleman for giving way and congratulate him on securing the debate. He is outlining some of the things that he hopes will happen. At the weekend we saw some publicity regarding the explosion in credit for purchasing new and recently second-hand cars. Does he agree that the last thing we want to see is a further explosion of credit on the back of an issue that has resulted from the expansion of diesel cars over the past 20 years?

[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.

[Geraint Davies]

I am grateful for the hon. Gentleman’s generosity in giving way. Does he accept that there is a strong case that the motor manufacturers, not just the taxpayer and the consumer, should make a major contribution towards the cost of such a scheme? Volkswagen has had to pay billions of dollars in the United States because of its cheat devices; we know that emissions on the road were at five or six times their supposed laboratory levels, and a lot of cars in France, Germany and elsewhere have been withdrawn for a refit. Is there not a strong case that the Government should go to the manufacturers for a contribution towards the scheme?

[Neil Parish]

I know that the Minister has had some strong discussions with Volkswagen. It is not just Volkswagen; car manuals often give a figure for miles per gallon and then a true figure that is about two-thirds of the ideal figure. They will say that the car does 60 mpg when it really does 45 mpg or 40 mpg, so there has been a certain amount of deception there. I also think that companies such as Volkswagen could buy themselves some public esteem by helping to support a scheme for moving towards electric vehicles. Not only should the Government talk to Volkswagen and other vehicle manufacturers; it would be good for those companies, which have manufactured so many diesels, to say, “We can help to convert people away from diesel.” The hon. Gentleman makes a good point.

[Andrew Selous]

Further to the point about Volkswagen, does my hon. Friend agree that there has also been a loss of tax revenue and that the Government should seek to get it back from Volkswagen and others? We taxed these vehicles believing that they were much lower-emission than they really were.

[Neil Parish]

My hon. Friend raises a good point. It is not just that people have paid less tax because they and the Government believed that their vehicle was emitting less. Those people were also sold vehicles that did not achieve the emissions levels that the manufacturer said they did, which raises the question of whether not only the Government but the individual motorists who bought those cars are entitled to some compensation. I suspect that some cases will end up in the courts, and it will be interesting to see what the courts have to say about them.

The Government should particularly consider targeting a scrappage scheme at poorer households and those that earn less than 60% of the median UK household income. They could taper support, with lower-income households entitled to a higher level of support for exchanging their vehicles.

My third proposal for a new scrappage scheme is that it should be targeted. I would limit it to the 5.6 million diesel cars on British roads that were registered before 2005, which are on Euro standards 1, 2, 3 and 4 and have higher NOx levels of at least 0.25 mg per km. This would complement current clean air zone plans to charge vehicles of Euro 4 standard and below, as well as the London T-Charge that will begin this October. A scrappage scheme would give diesel owners the chance to replace their older, dirtier vehicles before clean air zone charging is implemented, which is quite important.

Another option would be to geographically target the scheme at this country’s pollution hotspots. The think tank IPPR—the Institute for Public Policy Research—has estimated that there are around 900,000 Euro 4 or older diesel vehicles in the 16 top pollution hotspots in the country. By creating a targeted scrappage scheme, the Government could help to remove more than half the dirtiest vehicles from the worst polluting hotspots.

My fourth proposal relates to funding. The previous scrappage scheme in 2009 was targeted at cars that were more than 10 years old. A vehicle could be scrapped in exchange for a £2,000 discount—£1,000 from the Government and £1,000 from car manufacturers. I propose that a new scrappage scheme could follow a similar model. Funding should also be capped and time-limited, like the last scheme, which set deadlines of February 2010 or £400 million, whichever was achieved first. If the Government earmarked £500 million for the scheme, that could take nearly 10% of the 5 million dirtiest diesel vehicles off our roads. Evidence from the previous scheme shows that it was generally the oldest and therefore more polluting cars that were being replaced. Moreover, past schemes have generally brought forward investment decisions.

I know that Ministers have baulked at the costs of a scrappage scheme, but they should not be put off. It need not be an open-ended funding commitment. A targeted scheme capped at £500 million would be a real tonic to get dirty diesels off the road quickly. Even better, they would be replaced with ultra-low emission vehicles or a clean transport option. The Government still have vast air quality problems and the last thing we want is for them to end up having to pay fines. It would be better to go forward with something positive.

I will finish with two thoughts. The Secretary of State for Environment, Food and Rural Affairs has called air quality her Department’s top priority. The Secretary of State for Business, Energy and Industrial Strategy has said that electric vehicles are at the heart of the Government’s new industrial strategy. I cannot think of a policy that would better target both of those aims. A targeted, means-tested scrappage scheme in which diesel vehicles could be swapped for an ultra-low emission vehicle or a cleaner transport option should be a key weapon in the Government’s armoury for tackling air pollution. It would be the perfect complement to the new clean air zones strategy. I look forward to hearing from the Minister and other colleagues.

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[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.

[Neil Parish]

If I could just put the right hon. Gentleman right, I do not have a “country estate”; I have a farm. There is a little bit of a difference, and I was also a working farmer before I got here. Let me make that abundantly clear.

To be serious, the Government are already rolling out an infrastructure for charging points; we also want the fast charging points, so that people can charge up their cars quickly. As far as gas is concerned, there is an infrastructure out there already. A lot of garages supply liquid gas. There are probably not as many as we might need, but there is quite an infrastructure for gas out there already, so that does not need to be reinvented.

[Mr Spellar]

I think the hon. Gentleman is underplaying the position. I acknowledge the fact that he is a farmer—which is why I threw it in the way I did—but I would ask whether he and his neighbours use red diesel. There was no mention in his contribution as to whether the enormous discount on red diesel should be included in our considerations. Again, I note that there was no figure—no estimate—for how much all of this will cost.

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[Mr Spellar]

That is absolutely right, and I thank my hon. Friend for that. I suspect that the transmission capacity, particularly locally, will be affected in the same way. Equally, we have to look at the availability of petrol if we remove a great chunk of the diesel market, which may or may not also happen in the rest of Europe. What discussions has the Minister had with his European counterparts? The duty levied on diesel there is considerably lower, which is why they have much lower diesel prices in the EU. Reference was made to the European Commission putting the UK Government on notice and our Supreme Court responding to that, but it is interesting to note that the European Commission also mentioned a whole number of other countries, including Germany, France, Spain and Italy. Is there any common factor among those countries, apart from them being the major industrial countries of the EU? I therefore find it rather strange that we are looking at a major upheaval that does not seem to be mirrored by our European counterparts without getting proper figures in an impact assessment, and at a time when we are considering the uncertainties of Brexit. Apart from one or two towns and cities in one or two countries, there seems to be no similar reaction from other countries.

Equally, there seems to be no consideration as to whether, as was rightly said earlier, we could actually have alternative fuels for many heavy goods vehicles. There is a reason why, across the whole world, goods vehicles are overwhelmingly diesel. It has to do with torque, traction and so on, and that applies to many builders’ vehicles, which are for lifting and generate power to do that. That would not be possible with an electric vehicle—certainly not with the current state of technology.

Electric vehicles may have some minor advantage when sitting in traffic, but many of those arguing for this proposal should perhaps be looking at better traffic management. With a number of cities, and particularly London, quite a bit of the congestion has been aided and abetted by the construction of cycle lanes. Boris Johnson’s cycle lanes have generated congestion in central London, as taxi drivers and others will all attest, so we need to be looking at how we can deal with the problem in its various segments. With petroleum, it is true that we can keep cracking the oil in different stages and get more petroleum out, but that adds considerably to the cost—I will come to the cost to the individual in one second, after I give way to the Chairman of the Select Committee.

[Neil Parish]

I am finding the right hon. Gentleman’s contribution very interesting, because he is going into great detail on all the problems we have, but he is then saying that bicycles are causing problems. Surely people on bicycles are not emitting any emissions at all, other than breathing in and out as they are riding along. It is no good coming out with a whole list of things that are wrong with the proposal. I would like to see a bit of a more positive approach to the whole argument.

[Mr Spellar]

As the hon. Gentleman rides in on his bike from Battersea, he may notice that the bridges across the Thames are always much more congested than they used to be. That is because there is much less road space because of the introduction of cycle lanes.

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[Neil Parish]

I thank everyone for their contributions and the Minister very much for his reply. We need a scrappage scheme along with public transport and everything that we have discussed this morning. We need to reduce the amount of pollution in order to get better quality air in our cities and throughout the nation. A diesel scrappage scheme is very much part of that.

Motion lapsed (Standing Order No. 10(6)).