Clause 16
Finance Bill
3:45 pm
John Healey (Financial Secretary, HM Treasury; Wentworth, Labour)
Hon. Members have rightly pointed out that this provision takes us into new territory. It allows us to provide the basis for auctioning some of the allowances under the European Union’s emissions trading scheme, but in phase 2, which does not start until 2008 and runs to 2012. As my right hon. Friend the Chief Secretary to the Treasury said in a letter to, I think, the hon. Members for Falmouth and Camborne and for Chipping Barnet yesterday, the question of regulations cannot precede the detailed design of the allocations and auctioning scheme. That matter will be dealt with as the arrangements for phase 2 of the EU ETS are firmed up across Europe. Once the scheme design is clearer, we will be in a position to devise the regulations, covering the sort of points that the hon. Member for Wycombe identified. When we produce the regulations, we will do so in draft and we will consult as widely as we need to on them. I can reassure the Committee that the points made this afternoon will be taken into account in drawing up the regulations.
I would not want the Committee to lose sight of the importance of introducing the possibility of auctioning into the allocation of allowances and permits under the EU ETS. They will be an important way of toughening up the trading scheme, hardening the carbon price within it and thus starting to generate the type of investment in alternative technologies that we require to reduce emissions and deal with climate change.