HC Deb 17 June 2004 vol 422 cc900-1
5. Miss Anne McIntosh (Vale of York) (Con)

What representations he has received from the combined heat and power sector on the removal of fiscal incentives to develop CHP installations; and if he will make a statement. [179126]

The Economic Secretary to the Treasury (John Healey)

We have not received any representations from the combined heat and power sector on the removal of fiscal incentives, and have no plans to remove them. Indeed, on the contrary, only last year we introduced an exemption for good quality CHP from the climate change levy, and were strongly encouraged to do so by the industry.

Miss McIntosh

While it is true that the Government have granted an exemption from the climate change levy, it is equally true that they are imposing an obligation on CHP operators to purchase renewables obligation certificates, which has created a barrier to entry and has affected the ability of existing CHP operators to remain in operation. It has led to a haemorrhaging of jobs and investment. Therefore, will the Chancellor urge the Government to keep clause 120 of the Energy Bill and make sure that operators are not subject to that irksome fiscal obligation?

John Healey

No. If we did so, we would reduce the capacity to deliver the renewables obligation. There is a distinction to be made between CHP as a fairly mature technology and the renewable technologies that the renewables obligation is designed to promote. A wide range of measures is already in place to support CHP, including fiscal, grant and regulatory measures. At present, there is an increase in CHP generating capacity, but of course we keep such progress under constant review.

Mr. Barry Sheerman (Huddersfield) (Lab/Co-op)

Did my hon. Friend see the remarks by the chairman of Shell yesterday about the perils of global warming? If we do not take more action not only on CHP but on generating energy from waste programmes, such as incineration and many other things, and if there are no fiscal incentives to stop dependency on one source of energy, the country and the planet will run into dreadful problems.

John Healey

My hon. Friend is an expert in this area, so he knows that we aim to meet the target of the CHP sector of supplying 10 GW of generation by 2010. On the wider question of waste, he knows that we are putting in place a range of policy support instruments so that we can reduce the amount of waste created, boost recycling and achieve greater capacity to deal with waste in more environmentally friendly ways.