BIODIESEL (Hansard, 4 July 2002)

§ John Healey
I beg to move amendment No. 38, in page 5, line 10, leave out— 'the date on which this Act is passed'
and insert— 'such date as the Commissioners of Customs and Excise may by order made by statutory instrument appoint'.

§ Madam Deputy Speaker
With this it will be convenient to discuss Government amendments Nos. 39 to 41.

§ John Healey
Part of the Budget 2001 package that my right hon. Friend the Chancellor introduced to develop the 436 green fuel strategy was the decision to introduce a 20p per litre duty incentive for biodiesel in the Budget 2002. The Government decided to delay implementation until this year because we recognised that we would need a derogation of the EU mineral oils directive before the new rate could be introduced.
Over the past year, we have worked to secure that derogation. Hon. Members will know that the process can be difficult and protracted, but we now expect to receive all necessary European clearance before Royal Assent, when the new rate of duty will come into force. The derogation received final approval from the EU Agriculture Council on 25 June, and is now in place. The new duty rate, therefore, awaits only clearance by the Commission as an allowable state aid. The Government expect that clearance in the next two weeks.
However, if for any reason Royal Assent were to occur before we have been given state-aid clearance from the Commission, the UK technically would be in breach of the treaty of Rome. The amendments are simply a sensible precaution against breaching treaty obligations, although we expect to get the required clearance before the date on which Royal Assent is granted.

§ Mr. Bercow
I think that the Economic Secretary has finished his speech on these amendments, so I shall ask a question to which I think hon. Members and people outside will be anxious to know the answer.
There is an implication that the Economic Secretary might be mistaken about when clearance might be received. That is not very likely: he seemed confident that the required dates will be met, but he admitted to the possibility that they may not. That is why the Government feel it necessary to protect themselves against a possible breach of the treaty. Will the hon. Gentleman describe the revenue implications if the date that he envisages is met, and also if there is a delay?

§ John Healey
We do not expect any Revenue implications. Should we not get final clearance from the Commission before the date of Royal Assent—we do not expect those circumstances—immediately we get that clearance, Customs Commissioners can sign into force this provision, and they will do so without delay.

§ Mr. Simon Thomas (Ceredigion)
The speeches are so short I do not know whether they are interventions or speeches. Mine is a very short speech. I simply want to ask the Minister a question. I welcome what the Minister is doing—it is important to get that across. He obviously needs to make arrangements to be sure of compliance within Europe. Can he say something about the new biofuels that are being discussed at European level? Will that impact on the Government's planning? Will it be permissible for the Government to reduce the rate still further in future or, having agreed to this derogation—which we hope will be passed—does this now tie the Government's hands as regards any further reduction and support for biofuels in future Budgets?

§ John Healey
No, this does not tie the Government's hands. Any decisions that flow from this will be for the Chancellor of the Exchequer. I will stop now because I am in danger of straying well beyond the terms of a narrow technical amendment designed as a belt-and-braces job to make sure that the Government do not fall foul of the treaty of Rome.