---

Finance Bill

As I was saying before I so rudely interrupted myself, the hon. Member for Taunton (Mr. Browne) gave some figures on transport CO2 emissions and household CO2 emissions. The figures that he gave are almost the reverse of the figures in the Red Book—although perhaps he was right. He said that 25 million households produce 27 per cent. of CO2 emissions in the UK, which was double the amount produced by cars. According to paragraph 6.19 on page 94 of the Red Book, CO2 emissions from transport account for 28 per cent. of UK CO2 emissions. Paragraph 6.63 on page 103 states that households account for 14 per cent. of UK CO2 emissions, albeit that households account for a quarter of energy consumption. In moving the amendment, the hon. Member for Fareham (Mr. Hoban) said that constituents will ask what they are getting. On one level, he has a point. The changes are designed to change behaviour, yet between 1995 and 2005 the average CO2 emissions of new vehicles purchased in the UK fell by about 1 per cent. a year. CO2 emissions overall in the UK this century have increased rather than decreased. However, the amendment considers only—this is a criticism—the causes of climate change. Some hon. Members will know that one thing that upsets me about the tone of public debate in this Chamber and elsewhere is that we do not look sufficiently at the effects of climate change. I do not doubt the hon. Gentleman's figures about the tax take from vehicle excise duty going up markedly from £1.9 billion in 2006-07 to £2.9 billion in 2008-09. That amount of money should mean that our constituents—and constituents around the country—will potentially get protection from the effects of climate change. The part of the equation that we seldom discuss in the House is adaptation, which is the sort of thing that the amendment does not address. I have referred to the effects of climate change, and the Association of British Insurers estimates that last summer's flooding, principally in England, cost £3 billion. That money effectively comes from almost every householder in Britain, because the insurance premiums of all households, not just those affected by flooding, go up. The Government have massively increased the spending on flood control, both inland and with coastal defences and so on. That is the sort of thing that VED money is being spent on, albeit that it is not hypothecated, and it is something that our constituents are getting from this green tax. They are getting something that deals with adaptation—the effects side of the equation of climate change; it is not just about causes. The hon. Member for Fareham went on to say that 88 per cent. of vehicles will pay more. I do not doubt him on that figure. I warn the Government that, next year, we will risk another 10 per cent. kind of debate. This coming year, a vehicle in band F, which emits perhaps 201 g of CO2 per kilometre, will pay £210 in vehicle excise duty. From 2009-10, it will be in band K, paying £300 in vehicle excise duty. That is a £90 or 42.86 per cent. increase. A vehicle in band E, which emits 181 g of CO2 per kilometre, will pay £170 in 2008-09. That vehicle will go into band J from 2009-10, and it will pay £260 in vehicle excise duty. That is an increase of 52.94 per cent. The difficulty with those increases is that, to most of our constituents, they are retrospective. As I understand the Red Book—the Exchequer Secretary can correct me if I am wrong—table A.8a on page 122 is headed, ““VED bands and rates for cars registered after 1 March 2001””. It relates not to new vehicles that are bought with those CO2 emissions from next year, but to vehicles that are already in the fleet. So someone who bought a new car in band F in 2002 will experience a 42.86 per cent. increase in their vehicle excise duty for the very same vehicle—or, in the other example that I gave, a 52.94 per cent. increase. My constituents will regard that, quite understandably, as a retrospective tax increase; they will not take kindly to it, and the Government need to think again.