§ Mr. BattleTo ask the President of the Board of Trade what estimate he has made of the income to be generated from the fossil fuel levy in each year from 1996 to 2005; and what estimates he has made of the proportion that will be spent in each of those years on(a) renewables, (b) Magnox, (c) British Nuclear Fuels plc, (d) administration and (e) other. [2666]
§ Mr. PageThe Director General of Electricity Supply normally calculates the expected income from the fossil fuel levy annually, with the intention that income in each616W year matches expenditure. In respect of renewables, premium payments to generators under the first and second non-fossil fuel orders currently amount to almost £100 million. These will cease when their contracts finish in 1998. Payments to generators under the third NFFO order will rise as their projects come on stream, as would payments to generators under the fourth NFFO order which we intend to lay in 1997 and the fifth NFFO order in 1998. The future cost is estimated for the UK as a whole as a maximum of £150 million a year, but the actual cost could be substantially less than this if renewables continue to make good progress in converging towards the market price for electricity. The nuclear NFFO contracts will end in March 1998. In respect of Magnox, I estimate that payments in 1996–97 will amount to £680 million—of which £310 million relates to the period before the privatisation of British Energy—and to £123 million in 1997–98. Annual payments to BNFL are likely to amount to £25million in both 1996–97 and 1997–98. The annual cost of administration of the levy scheme remains fairly constant at £400,000. There is no other expenditure from the levy.
§ Mr. BattleTo ask the President of the Board of Trade what plans he has to make further reductions in the fossil fuel levy. [2667]
§ Mr. PageResponsibility for the calculation of the fossil fuel levy rests with the Director General of Electricity Supply. In July this year, the DGES announced that the levy rate would fall from 10 per cent. to 3.7 per cent. from 1 November 1996, and that he anticipated that it should be possible to maintain or reduce the rate from 1 April 1997.