Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op):
Tackling climate change and protecting the environment was one of the central themes of yesterday's Budget. When I saw that the Conservatives had put up the right hon. Member for West Dorset (Mr. Letwin) to open the debate, I thought that that would be a major theme of the Conservative contribution today. The right hon. Gentleman was evidently allocated to perform another role in the debate, but at least he did not perform it in the same foaming-at-the-mouth, carpet-chewing style of his leader yesterday, for which we must be grateful.

Although the right hon. Member for West Dorset did not take up the issue of climate change and the environment, I should like to record my welcome for the fact that the Chancellor chose to put it at the heart of the Budget, thereby reflecting the increasing concerns of our constituents. Some environmental organisation have, naturally, criticised the Budget for not delivering all that they would want, but that is in the nature of campaigning organisations. That said, some elements of the Budget have received a positive response from those organisations.

Mr. Graham Stuart :
The hon. Gentleman's expertise is recognised across the House. This Budget focused more on green issues than did the previous nine, but does he accept that the history of those 10 Budgets has been the Chancellor's failure to convert into action Labour's intentions before the 1997 election to change from taxing "goods" to taxing "bads" and fundamentally change this country's approach to its environmental responsibilities. That is why emissions have risen, and yesterday's Budget will make little difference.

Mark Lazarowicz:
No, I do not accept that. We are on course to meet our targets, as long as we continue to take the right policy decisions. We must, however, do more to ensure that tackling climate change is at the centre of Government policy. Growing public concern has been reflected in this year's Budget and in previous policies. I hope that the general positive response that the environmental proposals have received—from the hon. Gentleman, it would appear, in some respects—will hearten the Chancellor and encourage him to do more to ensure that climate change is at the top of our priorities. In that context, important decisions will be made over the next few months about the emissions trading scheme, about bringing aviation into the scheme and about the response to the Stern review.

Ed Balls :
What does my hon. Friend think that the green NGOs make of the fact that the Conservatives remain opposed to the climate change levy? What signal does that send about their environmental credentials?

Mark Lazarowicz:
NGOs will draw a clear conclusion about the Conservatives' environmental credentials. I was about to come to the climate change levy, so I am grateful to my hon. Friend for reminding us of the Conservatives' continual failure to move an inch on the levy. They have made so many U-turns and flip-flops that it might have been easy for them to change policy on the levy, yet they remain obdurate in their refusal to do so.

Mr. Graham Stuart:
Does the hon. Gentleman believe that the climate change levy, by being a tax on energy and not on carbon, is wrongly based? The Conservative party and four other parties have offered to work with the Government to tackle the biggest environmental issue facing the world, but the Government have refused. What does he think about that?

Mark Lazarowicz:
I am going to come to the question of working together in a moment. The fact is that the climate change levy has led to significant reductions in carbon emissions. By 2010, it will allow the overall energy demand in the economy to be reduced by more than 6 per cent. Unless the hon. Gentleman is living on another planet, which I am sure he is not, he will at least accept that a fair element of the energy that we use originates from carbon. That is why the levy has a heavy impact on carbon emissions.

It is not only me or the Government who say that. When I sat on the Environment, Food and Rural Affairs Committee in the last Parliament, we had an investigation into the means to tackle climate change. The various groups that came before us to give evidence did not say that the climate change levy was the wrong instrument but that it should be increased. That is why it is particularly welcome that the Chancellor said that it will be indexed so that it will be seen to have an impact on reaching our targets on CO 2 emissions.

David Taylor (North-West Leicestershire) (Lab/Co-op):
There is no doubt that the Conservatives' environmental policies are incoherent and all over the place. My hon. Friend and I were fellow-members of the EFRA Committee in the last Parliament. Does he recall the evidence from representatives of the energy-intensive industries such as the construction products industries in my constituency, and brick-making, who argued that the climate change agreements have delivered the reduction in emissions? At a time of high energy prices, they would welcome some respite, but recognise that penalties are needed if CCAs are not complied with. They have a point, do they not?

Mark Lazarowicz:
The two elements go together. On their present trends, the climate change levy and the climate change agreements will have a roughly similar effect in terms of a reduction of carbon emissions. They both have their role to play. Clearly, any tax can be refined and improved, but the key point is that the levy has had a significant impact on reducing emissions in the UK. Independent—not Government—research has shown that it has had a significant impact on the behaviour of businesses. Adding that fairly small, but visible, element to their costs encourages them not only to reduce their energy costs but to look at other ways of operating and improving energy overall, which has a positive effect on our carbon emission reduction targets. We must also bear in mind that taken together, the overall effect of the reductions in energy demand and in national insurance contributions has been a reduction in costs for business as a whole. That has to be seen in the round. Elements can always be adjusted and improved, but the general direction is one that we should support.

I am genuinely puzzled by the Conservatives' refusal at least to give some qualified backing to the climate change levy. They are entitled to say that they want to see change but this is not the right one and they would do something else in future. We get one or two hints of what that might be from vague references to a carbon tax, but merely saying that that might be the answer does not take us much further, because it could be applied in many ways. We have not seen anything representing a worked-out proposal from the Conservatives—perhaps we will hear about it later in the debate—so we have no idea of what alternative they would put in place.

No doubt their conversion to the green agenda is genuine, although there may be some exceptions. However, they cannot tell us time and again that we will have to wait until the machinery—no doubt wind-powered—of Conservative think-tanks grinds out some kind of policy recommendation before they come off the fence on the climate change levy. Surely the right position, if they were really concerned about the issue, would be for them to say, "We don't think it's the best policy and it's not our preferred policy, but it's making a difference and having an impact. We will support it now and in the Lobby at the end of these debates on Tuesday, and in due course we will come forward with an alternative." Surely the Conservative party should not undermine a policy that has had a significant effect on reducing carbon emissions. Everyone who has an interest in the subject and knows about it realises that.

The Paymaster General (Dawn Primarolo):
Perhaps my hon. Friend can reflect in his eloquent speech on the importance of the climate change levy and the contribution that it makes to reducing our carbon emissions. He will recall that, when the Government introduced the levy, the Conservative party not only opposed it but had no alternative suggestions for dealing with climate change.

Mark Lazarowicz:
Indeed. Perhaps we are not much further forward but doubtless we will hear about it if such alternatives are proposed.

Mr. Ellwood :
The hon. Gentleman questions the sincerity of the Conservative party's green credentials. Can the Labour party fulfil its 2001 or 2005 manifesto commitment to reduce carbon emissions?

Mark Lazarowicz:
I do not question the sincerity of the Conservative party. I am prepared to accept that, for whatever reason, a change of direction has occurred. Conversion is one thing but it must be followed by specific policies if one is to make a difference and persuade the country that it is not some form of tactical, short-term change.

Our policies are moving in the right direction and they have made a significant impact. The climate change review next week will outline the other steps that we are taking to try to ensure that we reach our international and national targets.

Mr. Graham Stuart:
I believe that the hon. Gentleman is genuinely committed. Unlike with so many Labour Members, I do not find it necessary to denigrate the motives of my political opponent. However, he has not mentioned that, under the Government, CO 2 emissions have increased and are continuing to rise. That is a failure of Government policy. Emissions fell under the Conservatives and are increasing under Labour. This dirty Chancellor is letting down the environment.

Mark Lazarowicz:
We accept that we need to do more to reach our targets. However, without the climate change levy, carbon emissions would be even higher. That stands to reason. The hon. Gentleman should accept that, if we are to hit our targets—we have all said that we will do that—the climate change levy has an important role to play. I am therefore disappointed and genuinely puzzled by the way in which the Conservative party will not move on the issue.

The Opposition's approach is unfortunate if we are trying to hold a serious debate on how to make progress on policy. I do not want to spend all my time on the climate change levy, but its beneficial impact on carbon emissions is acknowledged. If we cannot get even qualified Conservative support for it, we encourage disillusionment and cynicism outside the House, and the idea that all we do in here is talk about tackling climate change without effecting specific policies. I therefore hope that the Conservative party may yet reconsider its position.

Mr. Kevan Jones :
Does my hon. Friend agree that we can now see the difference between the public statements that the Leader of the Opposition has made on climate change and what is actual Conservative policy? Where is the substance? Is it not clear from the fact that the Conservatives are not conceding on this issue that the gimmicky things that their leader has been saying over the past few weeks have no substance?

Mark Lazarowicz:
I shall be more charitable than my hon. Friend. All I am saying is that I am posing questions on this issue, and that it is reasonable to expect answers from a party that claims to wish to be elected to Government at some stage in the future, although one might have doubts as to how soon that will be.

Another reason why the Conservatives' refusal to move on the climate change levy is so unfortunate is that, in the past, the right hon. Member for West Dorset and other Conservative Members who have been involved in these debates have recognised that we need a broad political consensus if Governments are to have the political space to introduce the undoubtedly radical measures that are required to tackle climate change. If we cannot get practical evidence of support for a consensus on the climate change levy, we are entitled to ask how much chance there is of getting a consensus on the wider agenda.

The Budget proposed an increase in vehicle excise duty for gas guzzlers, and I believe that that proposal has the support of the Conservatives, although I might be wrong. Some of their Back Benchers seemed to suggest that the proposed rate of duty was not high enough. Whatever their position today, however, there is no doubt that, a few years ago, such a Budget proposal would have caused uproar and resulted in all sorts of media campaigns against it. Now, however, the political atmosphere has changed, and such policies attract a positive response from the vast majority of the public, apart from a few moans and grumbles. We have yet to discover the Liberal Democrats' position on this, and I was surprised to hear some of the comments made by the hon. Member for Orkney and Shetland (Mr. Carmichael) earlier. Nevertheless, I believe that this proposal is generally accepted as the right thing to do.

Mr. Kevan Jones:
Like my hon. Friend, I welcome that change. Is he, too, looking forward to seeing those on the Conservative Front Bench getting rid of their gas-guzzling cars and following the great example set by their leader in choosing an ecologically friendly Government car?

Mark Lazarowicz:
When I cycled into the House of Commons yesterday morning, I was interested to see a large number of Conservative Front Benchers also coming in by bike. I am sure that that was not a one-off gesture purely for the purposes of Budget day, and I am equally sure that we shall soon see hon. Members from across the House following their excellent example.

If we can achieve public consensus on an increase in vehicle excise duty on cars that consume more fuel, perhaps we can now start moving into a political space where we can take the even more difficult decisions that will be necessary to tackle climate change, particularly in terms of transport.

Paul Rowen (Rochdale) (LD):
Does the hon. Gentleman accept that the Government's green taxes have not kept pace with inflation, and that they have actually fallen as a proportion of people's expenditure? If we are serious about introducing green taxes to encourage people to use more environmentally friendly cars or aeroplanes, they need to be uprated fairly regularly.

Mark Lazarowicz:
The hon. Gentleman makes a reasonable point.

We will have to revisit the level of tax on fuel for motor vehicles. However, the Chancellor said yesterday that he would delay the decision on an increase in fuel duty until later this year, by continuing the freeze until 1 September, and there are good reasons for doing so. The present high level of world oil prices will clearly have had a bearing on that decision, which is understandable. However, I would not be surprised if there was a concern somewhere in the Chancellor's mind about the possible political consequences were we to return to a regular uprating of vehicle fuel duty.

If we seriously look at the issue, we will all know that, in spite of recent increases, the cost of motoring in real terms has gone down over the longer term and that the increase in greenhouse gas emissions as a result of increases in road traffic has been an important contributor to the UK's overall greenhouse gas position. One of the most powerful factors influencing the extent of use of motor vehicles is the cost of motoring. We cannot get away from that. We all know that it is true.

If we are really serious, we have to do something about the problem. Yet again, we have not heard any serious suggestions from those on the Opposition Front Benches about what we might do to recognise that reality. We certainly did not get them from those on the Conservative Front Bench. When the hon. Member for Rochdale (Paul Rowen) was not in the Chamber, I quoted from the comments made by the Liberal Democrat leader in the Budget debate yesterday. He criticised the new vehicle excise duty on 4x4s as being a very limited measure. I made the point that the impression that we gained from the comment made by the leader of the Liberal Democrats and repeated elsewhere during the day was that he was against the measure because it did not go far enough. He was in favour—so it would appear—of a higher increase in vehicle excise duty. That is certainly in line with what the hon. Member for Rochdale has just said. He nods so he seems to agree that he would like to see higher vehicle excise duty on the top-range vehicles.

When I pressed this point with the hon. Member for Orkney and Shetland earlier in the debate, he seemed to say that he was not in favour of an increase in tax on the high fuel-consuming vehicles in certain circumstances. He seemed to say that he would be against such a measure in remote and rural areas. One suspects that there is a close correlation between remote and rural areas and Liberal Democrat constituencies. Once again, we see the Liberal Democrat tendency to talk green at one level, but to explain to their constituents that it will not really affect them. Someone else will be green, but not them.

Paul Rowen:
I apologise for not being in the Chamber when my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael) made his remarks. I was in the Standing Committee considering the Road Safety Bill. My right hon. and learned Friend the Member for North-East Fife (Sir Menzies Campbell), who owns a Jaguar, made it clear that there should be a higher tax on his car. However, we must draw a distinction between farmers who may need a Range Rover to do their job—they can be recognised, and they are already exempt through the red diesel provision—and those who use their car for leisure. Exemptions could be made in certain circumstances. That is the point that my right hon. and learned Friend was making.The general point is that there must be a proper discussion about the use of green taxes if we are going to get people—

Mr. Deputy Speaker (Sir Michael Lord):
Order. The hon. Gentleman has made his point.

Mark Lazarowicz: The point that I was making rather meekly was that the Liberal Democrat policy was to be in favour of being green in general, but not of being green in particular. I shall leave the House to decide whether the hon. Gentleman has refuted my assertion.

Ed Balls:
Does my hon. Friend agree that, whether it is the top rate of tax or the top rate of vehicle excise duty, the Liberal Democrat position is still very hard to fathom?

Mark Lazarowicz:
I cannot but agree. The position of the Liberal Democrats has been of some interest to the House, and I notice that, at the end of yesterday's debate, the hon. Member for Eastleigh (Chris Huhne), who also speaks for the Liberal Democrats on these issues, seemed to endorse the proposal from the Energy Saving Trust for the increase in VED at the top end of the range to go up to £2,000 rather than £200. That appears to be the direction of their policy, but no doubt it would not apply to Liberal Democrat voters living in Liberal Democrat constituencies.

Mr. Kevan Jones:
Does my hon. Friend agree that for the leader of the Liberal Democrats, who, as we have heard from the hon. Member for Rochdale (Paul Rowen), drives a large Jaguar—clearly, he does not transport sheep around in it—the challenge would be to give up that vehicle as a good example for the green lobby in this country?

Mark Lazarowicz:
The leader of the Liberal Democrats happens to be a constituent of mine, and I must admit that I have not seen him drive his Jaguar around the constituency with sheep or anything else in it. I shall leave it to him to make his choice.

In directing my comments at the Conservative, Liberal Democrat and, for that matter, Scottish National party and Unionist Members, my purpose is to say that if we are to get a genuinely comprehensive approach to controlling emissions from motor vehicles, we must address the cost of motoring. Unless that cost gradually increases, we will see increasing use of motor vehicles, with the consequential effect on CO 2 emissions. If hon. Members accept that, as I am sure that they would, it is fair for me to ask them to give a guarantee to the House. Were the Chancellor, later this year, to go ahead with the increase in fuel duty, would they back him in that decision and not jump on a bandwagon with all sorts of unsavoury individuals to say why they cannot support an increase in that particular case?

Mr. Graham Stuart:
The hon. Gentleman demeans his green reputation by playing party politics to cover up the Government's failure. There are serious points to be made in this debate, and he is more than capable of making them. Is he aware that this year, for the first time in a number of years, the CO 2 emissions impact of the United Kingdom's newly bought vehicle fleet is worse than that of the previous year's fleet? That is an unfortunate turn for the worse under this Government.

Mark Lazarowicz:
I was not trying to go too far down the road of making party political points, but the nature of the Chamber tends to encourage one to do that. My fundamental point is that if we are to get a real political consensus on tackling climate change—a genuine one, not a notional one—that requires parties across the Chamber to recognise the steps being taken. When, later in the year, we inevitably debate the level of fuel duty, I hope that the same commitment to tackle climate change will be shown by Opposition Members, rather than, as often happens, they deciding to jump on whatever bandwagon seems most popular with voters in the short term.

Stewart Hosie:
Will the hon. Gentleman give way?

Mark Lazarowicz:
As I mentioned the SNP, I shall give way to the hon. Gentleman.

Stewart Hosie:
The hon. Gentleman is generous. I also enjoyed the badinage between him and the Liberals. On a serious point, however, does he recognise the difference between a working 4x4 vehicle used by a hill farmer to take feed to a field of lambs in the late spring when there is snow on the ground, and a brand new Porsche Cayenne sitting outside a large house in Kensington?

Mark Lazarowicz:
I recognise the difference. In those circumstances, however, I suspect that the costs could be reflected in other ways in the income and expenditure of the particular business, but that would take us in another direction.

My point is that it is easy for people to say that they are in favour of increases in VED on gas-guzzling cars and then to find all sorts of reasons why it does not apply to them or their constituency. We have seen some evidence from the Liberal Democrats today that they are moving towards that approach. I had not expected to speak at such length, and I will try to conclude my remarks soon.

Just as motor vehicles raise the issue of fuel duty, the increase in air travel raises the issue of the continual and worrying rise in greenhouse gas emissions and of what measures to implement in response. I would have liked an increase in air passenger duty in the Budget, or some alternative form of taxation, in recognition of the problem caused by the growth in air travel. If we are to have a serious debate, the Opposition parties should make clear whether they are or are not in favour of an increase in air passenger duty at least in line with inflation. The hon. Member for Eastleigh seemed to imply that he was in favour of such an increase, but it was not clear that that was Liberal Democrat policy.

Mr. Andrew Turner (Isle of Wight) (Con):
While many of us may want an increase, or indeed the imposition of tax on aviation fuel, that view would be expressed more credibly by Labour Members if the Government were not expanding the supply of airport space. When the availability of airport space is restricted, the price of using that space goes up and the increase must be passed on to the consumer, but when the space expands, the price of air travel continues to fall.

Mark Lazarowicz:
I have made clear my own reservations about the airport policy in so far as it affects my area and others, but I think that it would be wrong to think that the issue could be dealt with through airport policy alone. We must think about the pricing of air travel as well. It is a complex issue, and we are right to try and tackle it at a European and international level, but I think we could consider it here in the United Kingdom as well. I think that it would have been better if the Budget had provided for an index-linked rise in air passenger duty rather than a freeze.

Paul Rowen :
Is the hon. Gentleman not aware that my hon. Friend the Member for Eastleigh (Chris Huhne), our environment spokesman, has made our policy very clear? It was discussed at our conference in Harrogate a few weeks ago. We are in favour of exactly what the hon. Gentleman has proposed.

Mark Lazarowicz:
I am glad that we appear to be clear about the fact that that is the Liberal Democrats' policy, although I must say again—without wanting to become involved in the badinage in which some Members wish to engage—that it is a pity that the Liberal Democrat policy in theory is not the same policy that is applied in practice. In Scotland, where the Liberal Democrats are in government, the Liberal Democrat transport Minister is subsidising air travel to many parts of the world. Indeed, he recently introduced an air travel subsidy for, as it happens, the constituency of Orkney and Shetland. First-class as well as economy tickets are being subsidised. As I have said, it is all very well to have a policy in theory, but in the case of the Liberal Democrats we sometimes do not see the same policy in practice.

We should think about what will happen if we are to be able to secure enough broad consensus and political space to allow Governments to take steps such as increasing air passenger duty. We all know what might well happen if there were a major increase: there would be all sorts of tabloid campaigns about its affecting people's ability to go on holiday, and so forth. That is why it is fair for me to ask the Opposition parties to be clear about their policy. We seem to have received a response from the Liberal Democrats, but it would be interesting to know whether the Conservatives are in favour of at least the index-linking of air passenger duty. The fact that none of them are choosing to intervene may speak for itself.

Mr. Russell Brown (Dumfries and Galloway) (Lab):
I entirely agree with my hon. Friend. I do not believe that working families would want their opportunities to travel abroad for holidays to be affected in any way. Does my hon. Friend agree, though, that there is a fundamental difference between a rather inexpensive holiday abroad and flights being offered at 99p? That is sheer abuse, and we must try to control it as best we can.

Mark Lazarowicz:
Indeed we must.

Let me summarise the main points that I have tried to make in a speech that became longer than it was intended to be. I think that the Budget set out—as we apparently say nowadays—a clear direction of travel in terms of the priority given to tackling climate change and environmental policy, and I welcome that. I believe that we need to go further with fuel duty not only on cars and other such vehicles, but on aviation. I challenge the Opposition parties to make it clear that they are prepared to go in that direction and to provide the political space for the Government to implement such measures.

I say again to the Conservatives that being prepared at least to reconsider their position on the climate change levy would be much greater evidence of their commitment to tackling climate change.

This is a good Budget and I welcome its commitment to tackling climate change. I particularly welcome the extra funding given to microgeneration, a subject with which my private Member's Bill deals. Indeed, I should have declared earlier an interest in that regard, which is listed in the Register of Members' Interests. That Bill is an example of how we can make progress on such issues through broad, cross-party support. The public are genuinely interested in taking steps in their own homes and communities to respond to the challenge presented by climate change. I welcome the Government's decision to put climate change and environmental issues at the heart of the Budget, and in doing so they are responding to growing public concern about such issues.