§ Ms Armstrong
Last year we published draft regulations which determine which items of plant and machinery are assessed for business rates. The regulations reflect the recommendations of the second Wood Committee. In particular, generating plant and machinery belonging to the power industry will benefit from a "tools of the trade" exemption although such items which are in the nature of a building or structure will continue to be rateable.
We have now decided that plant and machinery used to generate electricity (such as turbines and engines) in all Good Quality Combined Heat and Power (CHP) schemes, including those used in wider industry, should benefit from this exemption.
De-rating such plant and machinery in CHP installations will ensure that those items are treated equally across all sectors. It also illustrates our continued support for the increased take up of CHP technology which can bring considerable environmental and economic benefits.
We will introduce the exemption from 1 April 2001 when the CHP Quality Assurance programme for assessing the quality of all types of CHP will be fully operational. The programme will determine the eligibility of CHP schemes for a range of benefits including exemption from the Climate Change Levy. The rating exemption for CHP plant and machinery will require a change in secondary legislation which we will publish in draft later in the year.