Clause 7
Finance (No. 2) Bill
5:45 pm
Helen Goodman (Bishop Auckland, Labour)
We acknowledge that the Financial Secretary and the Treasury have to balance several competing demands in this clause. One is in respect of the impact on the environment. If there were no increases in duties, the Treasury would be subject to criticism on that score. Another demand is in respect of the impact on agriculture, about which my hon. Friend the Member for Ludlow is extremely concerned. If there were increases in duty, the Government would be criticised on that score, so it is difficult for them to strike a balance.
Then there is the question of fraud. The Financial Secretary and I considered the matter previously, during a debate in January on a statutory instrument. I asked him what the impact on fraud had been of reducing the differential between main road fuels and rebated fuels. I wanted to know to what degree any reduction in fraud had been the result of beefing up fraud detection by the recruitment of more inspectors, rather than narrowing the differential. I want to give credit to the Financial Secretary, who said with commendable honesty that he could not answer the question. He went on to say that
“analysing and estimating the scale of fraud generally is a relatively inexact science. Very often, it is not really possible to isolate the impact of individual measures.”—[Official Report, Third Standing Committee on Delegated Legislation, 9 January 2006; c. 10.]
That raises the question of how effective the anti-fraud element of the measures will be.
As the increases will not be implemented before September and will generally be in line with inflation, we shall not oppose them. I return, however, to the question of balance. We are concerned, as is the National Farmers Union, about the effects of rises on agriculture. The Financial Secretary and I know that the NFU announced in the wake of the Budget that it intended to write to the Chancellor seeking an exemption from the increase in the cost of red diesel. I do not think that the Financial Secretary confirmed that he received such a letter, but I should like to know whether he did and, if so, what is the Government’s response?
We shall not oppose the clause. We have serious concerns about the effects of the rises on agriculture, and we will be watching closely what happens in the run-up to next year’s Budget.