§ Mr. Barry FieldTo ask the Secretary of State for Transport what factors underlie the differential in fuel duty between private bus companies and private rail companies. [2600]
§ Mr. BowisIn 1993, operators of rail passenger services were charged duty on diesel at a rate of 2.33p per litre. Bus operators of registered local bus services were eligible for fuel duty rebate and effectively paid no duty on diesel. In 1993, my right hon. and learned Friend the Chancellor of the Exchequer froze the level of fuel duty rebate for buses at 25.14p per litre. This coincided with the strategy of increasing fuel duty by on average at least 5 per cent. per annum above inflation every year, to contribute to the UK's Rio target that levels of carbon dioxide emissions should be at 1990 levels in 2000. It was important that the UK bus industry also played its part in improving fuel efficiency and in meeting the Rio target. It would not be possible for the red diesel scheme set up for rail, agricultural and construction uses to be applied to buses, or to charge different rates of duty for different uses of red diesel. This creates practical difficulties in changing the taxation of diesel used by rail in response to changes in the fuel duty regime for buses.