Assessment of Exhaust Emissions

Richard Burden Excerpts

Monday 8th February 2016 General Committees

[The Chair]

We have until 5.35 pm for questions to the Minister. I remind hon. Members that questions should be brief. There will be an opportunity for debate after the questions, and I may, at my discretion, allow supplementary questions.

[Richard Burden (Birmingham, Northfield) (Lab)]

I apologise to the Committee in advance, Mr Nuttall, as I am suffering from a cold. I hope that I do not tax Hansard too much, and that it does not mess up the Official Report too much if I start coughing, spluttering or sneezing.

I have two sets of questions. I welcome the fact that the regulation has been scheduled for debate; I thank the European Scrutiny Committee for recommending it. My first set of questions is on the regulation itself, and the second set is on the subject of Volkswagen, which both the European Scrutiny Committee and the Minister have mentioned as being directly related to it.

A number of organisations opposed to the revision of the emissions testing rules, including, I understand, the European Parliament’s own legal affairs committee, have argued that the introduction of conformity factors runs counter to the aims and content of the 2007 EU regulation on the type approval of vehicles. Will the Minister confirm what legal advice the UK Government have received on that matter, and can he assure the Committee that the UK would not end up being prosecuted in the event of a legal challenge?

Will the Minister also confirm how he expects the review mechanism to work in practice? He is absolutely right that the regulation itself will not weaken Euro 6 regulations, but let us be clear that the criticism has been that by allowing a conformity factor of 0.5, there could be an open-ended permission after 2020 for manufacturers to breach the standards by up to 50%. If the reason for the conformity factor is technical deficiencies, or potential technical deficiencies, in testing machinery, what will be done to stimulate the technological improvements that will avoid the need for a conformity factor so great after 2020, and hopefully altogether?

My third question relates to recent discussions in the Select Committee on Transport. In correspondence with the Committee and the Commission, the DFT emphasised its willingness to focus on a new test approach based, I understand, entirely on real-life driving. Will the Minister tell us what feedback the Department has received from the Commission about supporting research by the Joint Research Centre, and what steps the Government are taking to implement that approach?

To simplify administration and the cost of testing, manufacturers will need to test only a minimum number of vehicles representing extremes of performances of wider families of vehicles. How will the Minister ensure that that is done appropriately, and what assessment has he made of smaller manufacturers, for which testing costs could be most acute?

I turn to the VW scandal. The Minister will be aware that legal proceedings are under way in several countries, including Germany, the United States of America and South Korea. What discussions has he had with the Serious Fraud Office and the Competition and Markets Authority, and why is the UK not suing VW? In a written answer before Christmas, he assured me that he would make a statement in the new year on the emissions inquiry, so can we have one now on how many vehicles have been re-tested, what has been found, at what cost, and when he expects the programme to be completed? Will he confirm that the Government will still seek reimbursement for the Vehicle Certification Agency’s re-testing? Does he agree with VW’s decision not to compensate VW owners in the European Union?

Finally, in addition to the 1.2 million customers affected by the NOx defeat devices, I understand that Volkswagen has since admitted to irregularities in tests for carbon dioxide affecting up to 36,000 vehicles. What tests have the Government done to verify that, and can the Minister assure us that VW will be liable for the costs relating to the tests and any shortfall in vehicle excise duty that arises from those irregularities?

[Andrew Jones]

The hon. Gentleman asked quite a number of questions. I will take the questions on VW first.

The Government first became aware of the installation of software fitted to Volkswagen vehicles to distort emissions testing following the announcement of the US Environmental Protection Agency’s investigation on 18 September last year. We have widely condemned VW’s behaviour and demanded that it take early action to rectify the situation. Our priority is to protect the consumer, to restore confidence in the real-world performance of diesel vehicles and to ensure that VW supports its UK customers.

The VCA has secured an assurance from all automotive manufacturers outside the VW group for which it has issued emissions type approvals that defeat devices have not been used. The Government have called on the EU to conduct a Europe-wide investigation into whether there is evidence that cars have been fitted with illegal defeat devices. We have obviously gone on to test vehicles, and on 10 November, the Secretary of State announced an emissions testing programme to look for defeat devices and to improve our understanding of the real-world emissions performance of vehicles used in the UK. That investigation is vital to restore public confidence.

The VCA, our type approval authority, first reran lab tests for those VW group vehicles for which it had provided approval. Those initial tests provided valuable information for improving our ability to detect a defeat device and strengthened our understanding of the impact on vehicle emissions. To ensure the independence of the testing, the Department is funding the programme and neither the cars nor the testing facilities will be provided by the vehicle industry. We are completely distant from anything in the sector. We are testing 40 vehicles that are representative of a significant proportion of the overall vehicle fleet. The testing is proceeding well and we are using all the facilities we have in our country to make the process happen as quickly as possible, but we are only halfway through it. That is why we have said that the findings will be published in the spring. It would be premature to make further announcements today because we would be doing so only halfway through the programme, which would not be appropriate. We have been clear that we will not provide an ongoing commentary because we will need to conduct in-depth analysis when we have completed the process and ensure that the results are viewed in context, which can be done only at the completion of the testing. I cannot say more than that on the VW issue today.

I emphasise to the Committee, however, that although the VW crisis has brought things more into the public eye, the work on real driving emissions started long before the VW issue was on anybody’s radar, and that will continue. The proposal before us is about testing for all marques, not just one, and for all vehicle fuels, not just those diesel fuels used in the particular type of engine that caused the problem at VW. While VW is a part of this, that is only in the sense that it has brought the issue further into the public domain. On how we can improve performance, we are building on the success and progress that we have had on air quality over some years—we have gone from Euro 3, Euro 4 and Euro 5 up to Euro 6—and these proposals are a step change. I just want to put things in context for Members, because while that issue is related, it is not the key one.

I will now deal with some of the other questions. Provisions for small manufacturers will be discussed and agreed in the package 3 negotiations, which will take place later this year. The UK has already highlighted the importance of the matter to the Commission and is in discussions with manufacturers here, such as Aston Martin.

I can certainly confirm that discussions are continuing with the Serious Fraud Office and the Competition and Markets Authority. They are independent bodies, so it is for them to decide whether to investigate. We are fortunate to live in a country in which politicians do not direct the legal process.

We need to reflect a little on the issue of changes to measurement tolerance, which is a significant factor. The intention, with the first transition step in 2017, is that the conformity factor can be reached through software and calibration changes alone, and a conformity factor of 2.1 has been agreed. That includes any measurement uncertainty.

The second and final step, in 2020, will brings the conformity factor down to 1, which represents parity with the lab test plus, again, measurement uncertainty. Research conducted by the European Commission’s Joint Research Centre examined the various sources of error in on-road emissions measurements. Its conclusion was that there was a worst-case error margin of 0.375, which was why the UK supported 0.4 as a conformity factor. However, some member states argue that other factors that increase NOx emissions in real-world conditions should be taken into account, so an overall figure of 0.5 was agreed.

The Commission has committed to the European Parliament to review the tolerance quickly. We are dealing with new equipment and relatively new technology. The reason why such testing has been used for heavy goods vehicles before cars was simply that the equipment was so big—it could be put in the back of a truck, but not in the back of a car. We are not in that position now as technology is miniaturising. The Commission has committed to a quick review of the tolerance and possibly to moving to much tighter tolerance. We therefore know exactly the direction of travel and there is clear technological progress.

A further question was asked about reviewing our own position on real-world testing, but we have to be clear about what we are asking for before we speak to the European Commission. The Department and chief scientists are considering the matter. Once we know what must be done, we will engage with the Commission and the Joint Research Centre.

On the question of legal challenge, I think that we can be very secure and we have no concerns about that. Our legal opinion is that real driving emissions measures are consistent with Euro 5 and Euro 6 measures. We are not aware of legal challenges on that, and the Commission and the European Parliament are also content. The proposal will complement Euro 5 and Euro 6 testing in a laboratory.

--- Later in debate ---

[Richard Burden]

A lot of things to talk about arise from those questions and answers. The relationship between emissions and air quality is fundamental. We know that road transport is a key cause of the pollution that is damaging public health in towns and cities in this country, in the EU and around the world, so it is absolutely right that we are having this debate. Various Committees of this House have had and continue to have hearings on this matter, but it is important that other Members have the opportunity to scrutinise Ministers, and this is one such important opportunity.

However many issues are at play, we risk them being lost or conflated if we are not clear about two things. The accuracy of emissions testing has been an issue for a long time; it has not simply come up as a result of the VW scandal. Despite the leniency of the existing EU testing regime, it appears that in the European Union, as well as in the United States, VW has been involved in actively distorting test results.

I will return to the VW aftermath later, but let us consider specifically the regulation of testing. For a long time, emissions testing has been known to be inaccurate. Given the challenges of technology and the importance of getting variables to be as similar as possible for all tests, there is a gap between lab tests and emissions tests that reflects real-life driving. Policy makers and the industry have been aware of that for a while and have worked to improve the situation. In fact, an EU working group was set up as long ago as 2011, but the response has been woefully slow.

The well-known air quality crisis facing many of our urban areas, plus the opportunity for the UK automotive sector to become a leader in developing the necessary technology, should have prompted the UK Government to push for more action much earlier than they did. Despite what the Minister says, there is little evidence to suggest that the Government as a whole have not dragged their heels. As recently as July, there have been reports that the Department for Environment, Food and Rural Affairs was briefing MEPs to oppose measures on real-life emissions testing, and it is still not clear what was happening there or, indeed, whether DEFRA was consulting DFT. It seems that it was only when the VW scandal made emissions testing a concern for the wider public that the Government felt compelled to act.

We are where we are, and the regulations before the Committee have left the European Parliament, and all of us, in an impossible position, stuck between a rock and a hard place. Plain and simple, the choice is between consenting to regulation that sets a series of standards but that, after 2020, has built into it an open-ended permission to breach those standards by up to 50%, or getting something in place now to avoid more delays and get the testing improvements that we need in the long run.

Most people accept that limitations in the technology used for testing cannot yet provide 100% accuracy in all conformity tests. That is why we will not oppose the motion, because we must be realistic and get the regulations in place for their planned introduction in 2017, which is important for policy certainty and for ensuring that air quality improvements happen as soon as possible. Lessons have to be learned, however, and the Government must realise their responsibilities.

Labour welcomes the efforts by the European Parliament and, from what the Minister says, the Government to ensure that a review mechanism is built in to the regulations. Saying that there will be a review mechanism is one thing, but ensuring that that happens and means something is something else. It is crucial that the Government do not think, “Job done,” and that pressure on that review mechanism remains. For the sake of public health, we cannot afford to have open-ended emissions breaches in real-life driving tests.

As well as advocating research into the measuring capabilities, there must be a consistent and constant review of the regime to ensure that manufacturers do not avoid limits through other means. The Minister says that all manufacturers in the UK, other than VW, have made it very clear that they have not been involved in the kinds of practice with which VW has been involved. I accept and welcome that, but it is important that the tests provide a failsafe, because public confidence is at stake. The industry is as aware of that as anyone else.

Group testing is a reasonable measure to keep costs down, but the Government must support the VCA to ensure that we get an accurate snapshot of all necessary vehicles. In the longer term, the Government have to be a leader in the European Union and press for a whole new approach that focuses on real-life driving scenarios in a way that is seen to be representative and reliable. Domestically, I will welcome a statement from the Government on what assessment Ministers have made of the Environmental Audit Committee’s recommendations for an older diesel scrappage scheme and a review of vehicle excise duty.

Beyond the regulations, we must encourage the media, publications and consumers to maintain pressure for standards to be met. Manufacturers need to be encouraged to go below the emissions standards that are set out. It is easy to think that motorists do not care about emissions, but Which? magazine’s “Come Clean on Fuel Claims” petition suggests otherwise.

Turning to Volkswagen, the public outrage at what it has done has been real and marked. Not only has Volkswagen undermined trust in that company, but public trust in the whole automotive industry has taken a knock. That industry is vital to the UK and Europe, and is doing many good things, but the impact of the scandal has been very detrimental. Its aftermath and outcome are still not clear, however, and I appreciate the opportunity to put concerns to the Minister.

When did the Government actually know? I think that the Minister touched on this earlier, but before the scandal broke in the United States—back in 2013—the European Commission’s Joint Research Centre expressed concerns about the possible use of defeat devices. Why was that allegation not followed up? There is a need for a pan-European inquiry. The Socialists and Democrats in the European Parliament are pushing for that and have written to all member states. Are the Government responding to that request and, if so, what will they be saying?

The second issue is to do with what is going on now. The crux of the matter is that still no one fully understands what has happened. Lawsuits are taking place in Germany, South Korea and the United States. There is talk of fines and compensation in some countries, but not in others. The fact that 40,000 drivers have contacted Volkswagen directly underlines the uncertainty facing retailers, workers and drivers. In October, in front of the Transport Committee, Volkswagen apologised profusely and said that it had let everyone down. Now Volkswagen suggests that in Europe the defeat devices were not actually defeat devices at all, and that it will not pay compensation to European Union owners, even though compensation might be paid to owners in the United States of America.

Part of the problem is that our Government have not done enough to press Volkswagen because otherwise why is there still so much confusion among motorists about what is going on? It took a month before Volkswagen first wrote to its customers. No cars have been fixed and no one has an idea of what impact any repairs will have on fuel economy. We need to know what needs to happen and who will pay for it. There is a real risk that the Government’s failure to handle Volkswagen properly will be seen in the same light as their handling of Google, for example. We cannot allow VW to be treated as a Google and to be let off the hook. I appreciate that Volkswagen wants to make sure that the solution does not impact on vehicle performance, fuel consumption or driveability—that is reasonable—but at the same time, the delay is causing extra problems for air quality. At what cost are we letting Volkswagen sort out the problems in its own time?

There are other concerns that the Government have to address. The latest figures suggest that the impact of the scandal on sales figures has not been as bad as was originally feared, but what if there are traceable costs for the retail industry as a whole? Years of false emissions data means, in practice, lost vehicle excise duty. Ministers have promised that drivers will not face higher tax bills as a consequence of Volkswagen’s actions, and we will hold them to that pledge. To do that, however, the Government have to be able to calculate the shortfall for the 36,000 vehicles that apparently have irregularities in not NOx but CO₂.

The Government also need to look at what the cost of VCA re-testing has been and how to recover those costs. Will any fines be levied? As the hon. Member for Glasgow South said, while no one wants to get in the way of the investigations of the Serious Fraud Office or other bodies, there is still a question about whether fines could be levied and hypothecated to promote sustainable transport in the UK.

The development of an accurate emissions testing regime is fundamental to improving air quality and public health and has to be a priority for the Department for Transport. It should not have taken this long, but while the regulation is not to everyone’s liking or ideal, it is a step in the right direction. The important thing now is that the Government have to back their words with actions and not think, “Job done.” That means pressing for the Joint Research Centre to develop better measuring equipment and ensuring the VCA has the resources and finances it needs to do its job effectively.

Let us continue the re-testing, but in respect of VW, surely the time has come for the Government to give their backing to the call for a full Europe-wide inquiry. Nothing short of that will dispel the suspicion that VW could become another Google. If that impression is out there, it is bad for consumers and for the Government, but it is also bad for the automotive industry as a whole, which across the piece seriously wants to tackle the air quality challenge. Part of doing that is restoring public trust, which has to be done by drawing a line under the VW scandal, and that can only be done by maximum transparency, a proper Europe-wide inquiry and appropriate accountability being ensured.

--- Later in debate ---

[Andrew Jones]

I gently remind the hon. Gentleman that it was the portable emissions measurement equipment, which has been developed largely in response to the UK and others in Europe pushing for RDE, that actually enabled the investigators to unearth the VW issue in the first place. Europe is the first place in the world to introduce on-road emissions testing. The idea that we have been off the pace, complacent or asleep at the wheel is simply not true.

Has the reputation of the sector been damaged? Yes, it has. Has VW’s reputation been damaged? Yes. For what it is worth, my car has been recalled as part of the process. VW is not quite the company I thought it was when I bought the vehicle, and indeed paid extra for the environmental package as I sought to be a low-emitter driver. I am sure that the sector recognises that its reputation has been damaged. I have had that conversation with automotive industry players and with the Society of Motor Manufacturers and Traders. Real driving emissions testing is part of the answer and the key to recovering trust.

[Richard Burden]

I think the Minister is running two things together now; they are related, but they are separate. One is the need for real-life driving emissions testing, which is the purpose of this regulation, but the second point relates to VW and I do not think the Minister has addressed it. Before the scandal broke in the United States, in 2013 the EU Commission’s Joint Research Centre raised concerns about the use of defeat devices. I am not aware that that was followed up on. Was it and, if so, where was the follow-up? If it was not, why not?

[Andrew Jones]

Well, no hard evidence was shared by the Commission or the Joint Research Centre, and we cannot take action without hard evidence. It goes back to the point about real driving emissions testing being the answer. It is not a question of conflating different issues. VW and real driving emissions are separate but related issues. The VW crisis has brought to a head the work on real driving emissions, but that work started long before the VW crisis and will continue after the situation is resolved.

The Department was first aware of the situation on 18 September, as my right hon. Friend the Secretary of State said in his written ministerial statement. He has been following up on the matter and pressing VW to take care of its UK consumers. For example, he took the issue up with its UK chief executive on 10 December. There was a further question about whether VW has breached EU regulations. I have to say that it is not clear that VW has breached EU regulations, which is why the RDE package 2 agreement has included an amendment of the text relating to defeat devices to require vehicle manufacturers to declare any alternative emissions strategies.

The situation regarding compensation is also different in the USA and in Europe. In the USA, Volkswagen does not have a technical solution; in Europe, it does. However, the point remains that we are in the middle of the testing process. We have ruled nothing in or out and we will not comment further until we get to the end of the process and put all of it into context, but we will certainly speak up for UK consumers, and that is what we have done consistently.

We are committed to improving air quality, and the RDE agreement is crucial to delivering improvements in UK air quality and decreasing real-world NOx emissions. The current arrangement is the best option we have for environmental and health benefits and to ensure that vehicle manufacturers improve real-world emissions now. The implementation dates and conformity factors are challenging, as everybody in the industry recognises, but they are achievable. It is right to set demanding targets, because the goal of clean air will benefit our communities and is clearly important. It will require vehicle manufacturers to produce cleaner cars, starting next year.

I recognise that more work needs to be done at technical level. The UK is committed to playing a full and active role in finalising the remaining technical issues. We will certainly press the Commission to start a review of how RDE functions, with the clear aim of reducing the margin for measurement uncertainty that is in the final agreement.

The motion urges the UK Government to continue to press for action on real driving emissions. I am happy to make that commitment, but I hope that it has become clear in the course of this debate and in the answers that I have given that we are not just pressing for action; we are taking action, and we are leading the way on taking action. We started a long time ago, and we will continue to do so. The UK has a strong record on public health and automotive, and we have brought the two together to provide significant benefits for the people of this country.

Question put.