Fuels (Hansard, 16 December 1993)

§ 2. Mr. David Evans
To ask the Chancellor of the Exchequer if he will make a statement on the effect of taxation on the consumption of carbon dioxide-producing fuels.

§ The Paymaster General (Sir John Cope)
Taxes on energy products are one factor affecting their consumption and hence total carbon dioxide emissions.

§ Mr. Evans
I thank the Minister for his reply. Does he agree that we put political considerations aside when we put VAT on fuel and that we were more concerned with saving the planet? We put a generous compensation package in place—the most generous ever—which made the figure proposed by the hon. Member for Glasgow, Garscadden (Mr. Dewar) a weak, wet 50p. We beat that 50p. Does the Minister further agree that if we wired up that lot opposite, they would not produce enough energy to turn on the lights of Madam Speaker's Christmas tree?

§ Sir John Cope
As usual, my hon. Friend tells the truth with a flourish. The Labour party supports Rio and the reduction in borrowing, but it is not willing to accept the consequences.

§ Mr. Wigley
In the context of road fuels, has the Minister had representations from those involved in bus companies? The way in which the rebate works will considerably increase the cost of bus transport, probably to a greater extent that the Treasury has anticipated. Is he studying the matter? Can he tell the companies that the Treasury will find a way round the problem?

§ Sir John Cope
We always study carefully all representations that we receive. However, the cap on the bus fuel rebate will also encourage energy efficiency which, as the hon. Gentleman knows, is part of the point of the measure.

§ Mr. Dunn
Is not it a fact that the hon. Member for Glasgow, Garscadden (Mr. Dewar) complained about the way in which his proposal was treated only after the Budget was announced, when he realised that the Government were meeting the amount for which he had asked? Should not he make it plain that he did not complain before the Budget?

§ Sir John Cope
It came out clearly in the debates last week, following the Budget, that the hon. Member for Garscadden did not raise the matter until after the Budget statement.

§ Ms Harman
Will the Minister admit that 70p a week compensation for a pensioner couple will not cover the VAT on their fuel bill? Does he recognise how bitter and angry those pensioners will feel when they recognise that, in addition to the VAT, they will have to pay 70p a week on their insurance premiums, which will wipe out the effect of the VAT compensation? Is not that typical of this Conservative Government? Even when they are forced grudgingly to give a little with one hand, they take it all back—and more—with the other.

§ Sir John Cope
The decision on compensation will add £1.30 a week to the single pension and £1.85 a week to the married couple's pension by April 1996, when the measure is introduced in full.

§ Mr. Clifton-Brown
Does my right hon. Friend agree that if we are to meet the objectives of the convention on climate change, to which we signed up in Rio, we need to encourage more energy efficiency in the domestic sector, which my right hon. and learned Friend has done in his Budget by doubling the home energy efficiency scheme? We also need to burn hydrocarbons more efficiently in the transport sector. My right hon. and learned Friend has encouraged that by his pledge to increase the price of hydrocarbons by 5 per cent., which is a very tough target in real terms over the next few years.

§ Sir John Cope
All this goes towards fulfilling our Rio commitments which, as I said just now, the Labour party supports, although it will not accept the means outlined by my hon. Friend.