Speech by Susan Kramer, Shadow Secretary of State for Transport & MP for Richmond Park, at the Brighton Conference, 19 September 2007

Conference, when I was an innocent - recently, elected to Parliament - I was asked which would be my dream Shadow Cabinet Portfolio.

I explained that my passion is transport; I have a background in transport finance; I had served on the Board of Transport for London. I was given the International Development brief. But dreams come true. And I have been passed the transport portfolio just as the issues of climate change and environment reach a critical point of decision. We can change our behaviour. We can protect our planet and our future. Or we can indulge in business as usual. And our children will pay the price.

The Liberal Democrat Party has "clearly grasped the challenge of climate change". Not my words, but the words of 9 leading environmental groups in their report "The Green Standard". Key Labour advisors like David Begg admit that our plans will reduce emissions by much more than government targets. The Tories have tried to imitate us with a pale green version of our proposals. "Eat your heart out Gummer, Goldsmith. John Redwood got to your report even before it was printed. Don't you wish you had been able to put forward a real vision, a bold goal, a true response to climate change like the Liberal Democrats."

Conference, in tackling Climate Change, "it's the transport stupid". Transport is directly responsible for a quarter of all greenhouse gas emissions within the UK. And it is the only sector of the economy where emissions in 2020 are expected to be higher, unless we act, than the 1990 Kyoto baseline. Road transport is the biggest culprit. Aviation, however, is the fastest growing source of emissions.

So we have set out an ambitious and exacting programme of change. We have committed to the goal of a carbon free future for Britain's transport system by 2050. We target the behaviour of both the transport industry and of individual people. Let me take you through the key elements of that package.

First, road transport: Two-thirds of carbon emissions from transport come from private cars. Emissions have not fallen despite improvements in fuel and efficiency because more of us drive and many of us drive more. So we have to push harder, much harder, to persuade people to shift to public transport, to buy fuel efficient cars, to accelerate the improvements in technology.

Sticks and carrots matter. They are the basis of our "Green Tax Switch". We say the purchasers of the greenest new cars should be rewarded with zero Vehicle Excise Duty. And the drivers who insist on buying new high emissions gas guzzlers should pay up - and as you know, we propose graduating Vehicle Excise Duty up to £2,000 a year for the worst offenders. And many brownie points - I suppose it should be greenie points - to my local Liberal Democrat Richmond Council which applied the same principles to local parking charges in the teeth of Richmond Tories who try and pretend to be green.

Added to this, fuel duty has to rise in line with incomes if it is to be effective. Of course, there can be some adjustments for strange hiccups when oil prices spike. And both VED and fuel duty need to be lower in sparsely-populated rural areas. But the underlying relationship between income and fuel prices must be in place.

Tax is not the only instrument. It has to be part of a broader strategy. We have to cut road spending, with a presumption against any new major road schemes. We continue our commitment to a national road pricing scheme. And we continue our commitment to public transport - local rail, buses, trams and to cycling and walking.

Our goal is zero emissions for cars by 2040. That means the end of the petrol engine and its replacement by new technology. Industry will only meet that challenge if we use market pressures and broader emissions trading schemes; regulation through tougher EU standards; if we remove barriers to new technologies and set higher requirements for fuel to come from renewable sources. One of those renewable sources will be bio-fuels. But we must have safeguards to ensure that the bio-fuels we use do not displace food crops in poor countries or lead to the destruction of rainforest. But plans to change car travel are not enough with goals as ambitious as ours. We also need to tackle freight moving on our roads.

Now the Tories do have a plan for this. Gummer Goldsmith propose allowing lorries to use bus lanes. I just thought to myself "only some-one who is used to being driven by a chauffeur could have dreamed up the ultimate road rage proposal". Emissions from lorries have been rising since 1990. We now know that in 10 years time an additional 2 million box containers will be arriving every year at our ports

It's time to get serious about shifting freight from road to rail. We plan to introduce a lorry road pricing scheme based on the pay per mile schemes already working in Germany, Austria, Switzerland and the Czech Republic. But we will also vary our charges based on vehicle emissions. Every penny from the lorry road charges will go into our new "Future Transport Fund" whose purpose will be to get new rail projects off the ground, including rail projects and rail lines dedicated to freight. An 11p per mile charge on road freight would raise some £600 million a year for that fund.

And now to the second part of the package - aviation: If we do nothing, aviation will soon rival cars and lorries for the accolade of the worst polluter. If we continue "business as usual", air travel will account for a quarter of the UK's contribution to global warming in 30 years time. At the moment, the prices charged for aviation do not even remotely reflect its economic or environmental costs. So it's time to remove some tax breaks. At the EU level, we will be working to get tax on aviation fuel and VAT on tickets. We also want aviation in the EU emissions trading scheme.

But there are changes we can make without Europe. Air Passenger Duty gives no incentive to an airline to change behaviour. An empty plane pays nothing while a full plane, far more environmentally efficient, pays the most. Freight flights also pay nothing. So we would replace Air Passenger Duty with a charge based on pollution, providing an incentive to replace old aircraft, to shift to long-haul flights and to reduce the number of half-empty flights. The Tories are now copying us in this. And I fully accept that imitation is the sincerest form of flattery.

We will also ensure that landing slots at airports are auctioned and traded. I don't know about you, but after my experiences at British airports this summer, and after the farcical attempt to treat climate change protesters like terrorists - any charitable instincts I may have had towards the aviation industry are long gone! And I say this to the industry - we will not support an increase in runway capacity at major airports.

In the case of my own local airport, Heathrow, Liberal Democrats are now the only major Party taking an unequivocal stand to oppose a third Heathrow runway. The Goldsmith Gummer call to only put Heathrow expansion "on hold" pending a review, is a betrayal of local people across all political allegiances. The battle on Heathrow will reach its most critical stage in the next few weeks as the Government begins a consultation on expansion which would double Heathrow flights. I tell you, as Liberal Democrats, we will fight this every inch and every flight.

We have to tackle the issue of domestic aviation. Flights inside the UK are the fastest growing sector of the aviation industry. "Lifeline" flights to places like the Shetlands are of course necessary and would be exempt from these measures. But it is genuine madness that any traveller has to turn to plane travel to get from London to Birmingham or Glasgow to London in a reasonable time at a reasonable price. Talk to just about anyone who has to travel in the UK and they will tell you they want a decent, fast train service like the ones in Continental Europe or Japan.

So we will introduce a "Climate Change Charge" on passenger flights that originate and terminate within the UK, set at £10 per passenger. The charge is a direct signal to travellers to change behaviour. And the proceeds, some £200 million a year would also go to the "Future Transport Fund".

So let's talk about the Future Transport Fund. I have explained how we will finance it from charges on lorries and on domestic plane flights. This income should enable it to raise some £12 billion to put into key rail projects.

Again and again, as I have looked at rail projects that have collapsed, the weakness has been in raising funds for the early stages of planning and approvals. A project that can get past that stage is fit to attract regular funding from the capital markets. So our Future Transport Fund should be seen as a catalyst. And a £12 billion catalyst is a very powerful one. It can make new rail capacity possible. It can make freight only rail lines possible. It can make a High-Speed Rail network possible.

Demand is growing for rail services - even the Government now forecasts passenger growth at 30% by 2016. But we are frankly running out of capacity on our railways. The Government has just produced its new White Paper on Rail. It's quite good in the short-term. It gets rid of some of the worst bottlenecks and pinch-points. But it has no vision for the longer-term - it really says nothing beyond 5 years, it gives no support to High-Speed Rail and it has no cohesive vision for freight. I will tell you, I was so put out - I kept turning it over - I thought the Government had forgotten to print the back pages.

High-Speed Rail is the viable alternative to domestic flights and long car journeys. We know from examples across Europe that if journey times on any domestic route can be kept below 2 ½ hours, passengers will switch en masse from air to rail. That only requires trains travelling at 170 mph to mop up most passengers, for example, from London to Edinburgh. If rail links to the Continent permit journeys of under three or four hours, we can slash the number of passengers flying to Europe.

I can see nothing coming out of the Government or out of the Conservative Party that will build rail for the future. So we Liberal Democrats are taking it on. One of my most important tasks for next year will be to complete the funding framework for rail. We have launched a new Working Group on Transport. It will look across the full range of national transport policy and will report back to you this time next year. I very much hope that you who are here today will make sure your knowledge and ideas feed into the process.

Conference - Let me leave you with a grasp of how revolutionary our proposals are. On Monday this week, by passing the Zero Carbon Britain motion, we have committed to a transport future by 2050 that means:

High Speed Rail - journeys between cities in Britain and to the Continent will be by train rather than air

Zero Carbon for road transport - ending our dependency on oil - cars and other vehicles will run on bio-fuels, hydrogen or green electricity.

Green Freight - freight will shift to new dedicated rail lines and waterways, with much less dependence on roads.

Decent Public Transport - local rail, trams, buses - walking and cycling will meet the standards of the best in Continental Europe.

Conference, - It is a vision that only the Liberal Democrats could dare to conceive. It is a vision for a sustainable future.