Schedule 5
Finance Bill
9:15 am
Jeremy Browne (Shadow Chief Secretary To the Treasury, Treasury; Taunton, Liberal Democrat)
I am grateful for your guidance, Sir Nicholas. The amendments are related, but slightly different.
Both amendments are concerned with biofuels, but amendment No. 66 is specifically about off-road rebates. It would remove from the schedule proposed new section 14B of the Hydrocarbon Oil Duties Act 1979, which would allow mainstream use of duty rebates for biofuels that are used off-road.
I have tabled the amendment to explore a few matters, the first of which is what the Government are trying to achieve with the off-road rebate. The explanatory notes on the schedule state that they are trying to
“encourage the wider use of biofuels in off-road applications”.
Can the Minister provide the Committee with a projection of the number of litres of biofuel that will be involved?
As the Committee knows, there are concerns about the sustainability of biofuel production. For example, the rebate mechanism in proposed new section 14B is completely indiscriminate, meaning that sustainable biofuel production will not be differentiated from non-sustainable. If the explanatory notes are accurate, the Government do not appear to be addressing sustainability. It would be interesting for the Committee to learn both how that is factored into the Government’s deliberations and an estimate of the net carbon dioxideemission savings that the Government envisage being achieved as a result.
Will the Minister also clarify whether the measure is a revenue raiser? According to the economic and fiscal strategy report, the new rebate will make money: £5 million in 2009-10 and £10 million in 2010-11. I appreciate that those are not large sums in the grand scheme of things, but it is confusing to me how the Government intend to make money from a rebate.
I should be grateful if the Minister clarified whether the proposal also relates to non-road transport. Committee members will no doubt recall that Richard Branson’s first biodiesel train, the Thames Voyager, was converted to run on 80 per cent. petrodiesel, leading to an estimated 40 per cent. saving on direct emissions. As I understand it, the Government’s proposal requires only that the fuel not be used for a road vehicle. There is no specific mention of other forms of transport, such as planes, trains and sea vessels. I should be grateful if the Minister touched on that issue; that was my purpose in tabling the amendment.