Clause 5 - Acquisition of information etc.
Finance Bill
5:30 pm
Mr Christopher Chope (Christchurch, Conservative)
I, too, look forward to hearing what the Financial Secretary has to say. Although the clause is a step in the right direction, paragraph 7.30 of the Red Book states:
''There are already signs that this initiative is stimulating activity, including investment in production facilities and plans by one major supermarket chain to use biodiesel in lorries.''
My right hon. Friend the Member for Fylde is on the ball; it is clear that the users of biodiesel do not think that there will be a sufficient financial incentive to switch their vehicles fully to biodiesel. The headline figure of a 20p per litre reduction in fuel duty for biodiesel sounds attractive, but the reality is that it is impossible to put 100 per cent. biodiesel into a vehicle; it must be diluted so that only 5 per cent. per litre of diesel is biodiesel. The effective reduction is therefore only 1p per litre, which means that the cost of biodiesel will be higher because the cost of its production is 2p per litre higher than for standard diesel. That is why the Freight Transport Association says that the reduction will make no impact whatever. Its manager of engineering policy, Geoff Day, says:
''The idea of a 20p per litre reduction in fuel duty for vehicles that may be using many thousands of litres per year is obviously very attractive. However, as no engine or fuel injection equipment manufacturer will approve of pure biodiesel''
it will not make much impact in practice.
If every hon. Member is enthusiastic about the benefits to the environment and agriculture that can flow from the development of biodiesel, we challenge the Government on why they are limiting its reduction in duty. Why are they not going further?