Vince Cable delivers speech to the Green Alliance including aviation policy

The fact that you have invited me I take as a challenge to demonstrate that the
Liberal Democrats see the environment in holistic terms: not as a separate set
of concerns but connected to mainstream economic policy. I am also aware that
I am following in the footsteps of Mr George Osborne. I see that, since that meeting,
the Tories have deleted the environment from their list of 10 Reasons to Vote
Conservative. I don’t know what you did to him but I can assure you that I won’t
react in the same way. The environment – defined as part of a sustainable economy
– will be a major plank of our election message.

No one could now complain about lack of awareness of the climate change issue.
But I worry about the damage done by failure at Copenhagen and the process of
rapid political retreat now taking place, particularly in the USA. The underlying
problem is that climate change is an elite project with a narrow and thin political
base. It depends critically on public trust in science and scientists. That trust
has now been dented. I know that the sceptics are employing every dirty trick
in the book and are wildly overstating the significance of a few pieces of slipshod
work and exaggerated claims. But much damage has been done to trust in climate
science. I don’t agree with a lot of George Monbiot’s work but he was absolutely
spot on in his tough response to the slippage of scientific standards. Scientists
complaining about emails being stolen and the burden of FOI requests are behaving
like the more obtuse MPs during the expenses crisis.

What is now required to restore trust is to reassert the importance and values
of science: making it clear that man made global warming is not a fact but a scientific
hypothesis with strong evidential support; that there is a lot of uncertainty
about magnitudes and impacts; but that the costs of preventive action are likely
to be much less than the cost of climate change if it materialises. Climate science
must be open to challenge, like all good science. It is not a religion. And critics,
however tiresome, have to be treated with courtesy not abused (I can’t be the
only person who takes deep offence at the term ‘climate change deniers’, equating
sceptics with neo-Nazi holocaust deniers). Those of us who are still convinced
that climate change is a major challenge have to reflect that humility if the
arguments are not to be lost, irretrievably. What I can assure you is that the
Liberal Democrats will continue to give prominence to climate change as a crucial
issue we must address.

     

But let me turn to our approach to policy. Where economics and environment come
together is in recognising that the costs of environmental pollution should be
captured in the price. A proper marriage of economics and environment would sweep
away the array of subsidies, protectionist trade policies and tax breaks which
disguise the costs of farming, water extraction, fishing, timber production, waste
disposal, energy production, mining and manufacturing. Pollution costs would be
taxed as the rather dry pre-Keynesian economist Pigou argued almost a century
ago. There has been some progress at least in the developed world to tackle that
agenda. The Liberal Democrats bring together environmentalism and liberal market
economics and are comfortable promoting sustainable economics; while our sister
parties, in Canada and Germany for example, have a track record of delivering
on the ground.

That is also the rationale for carbon taxes which are clearly the best way of
setting a carbon price for consumers and producers. Liberal Democrats support
the concept. But in practice we are starting from somewhere else: a complicated
system of national taxes bearing quite heavily on motor vehicles but hardly at
all on domestic heating or aviation, with a modest industrial – climate change – levy and an EU carbon trading regime
(which has so far had minimal impact on the carbon price because permits have
been issued too liberally and grandfathered rather than auctioned).

We suggest that one useful step forward is to introduce realistic pricing for
aviation in ways that circumvent the treaty restrictions on taxing aviation fuel. Aviation
is a rapidly growing source of emissions and the last redoubt of the old idea
that polluters don’t and won’t pay. Aviation has unfair, distorting tax advantages
over competing modes of transport, notably long distance rail, because there is
no tax on fuel, no charge for landing rights which, in a sensible world, would
be auctioned (and in contrast to the track charges imposed on rail operators)
and with subsidised landing charges (cross-subsidised by shopping in the bizarre,
Alice in Wonderland world of aviation regulation). As a result aviation does not
pay for carbon, or localised – nitrogen dioxide – pollution or the disamenity
of noise, especially at night. We suggest as one – modest – first step: changing
the tax base, and increasing tax, by applying it to flight take-offs in a way
which captures the emissions generated by the engines and flight distance and
scrapping the current ticket tax which penalises the efficient use of aircraft
and doesn’t tax air freight. We would aim to raise £2.6bn from this green tax
which would contribute towards cuts in direct taxation on the low paid. We are
also opposed to the current ‘predict and provide’ approach to airport expansion
in the South East. We hope that the Conservatives will be as good as their word
in working with us to stop Heathrow expansion in particular.