§ Mr. Martyn JonesTo ask the Chancellor of the Exchequer what were the reasons for the United Kingdom's opposition to EC draft 8205/94, calling for changes in excise duty on biodiesel. [32162]
§ Mr. Heathcoat-AmoryAt the meeting of the Council of Economic Ministers—ECOFIN—in Luxembourg on 19 June, my right hon. and learned Friend the Chancellor noted that the proposal has been considered by the Council from time to time without making any real progress, and he suggested that the Council should not expend further effort on it.
The Government continue to find the proposal set out in EC draft 8205/94 unattractive for several reasons. We are opposed in principle to granting long-term tax subsidies to products which would not be financially viable without them. We are not persuaded of the agricultural, environmental or energy policy benefits of subsidising biofuels, and we remain concerned about the effect of tax subsidies on the market for by-products.