Schedule 5
Finance Bill
9:15 am
Justine Greening (Shadow Minister, Treasury; Putney, Conservative)
I rise to reiterate the points that have been made. There seem to be a couple of inconsistencies. One is the introduction of the off-road rebate at the same time that the Government are signalling the removal of the road rebate, although that will not take place for a couple of years. The Renewable Energy Association has expressed concern about the unintended consequences: good biofuels might stay within the renewable transport fuel obligation, which applies to on-road use, but bad biofuels—those made in a less sustainable way—might be used off-road. I do not think that that will achieve the Minister’s aims.
I shall take this opportunity to ask the Government more broadly what their strategy is with regard to biofuel. Although it is not covered in this Finance Bill, the Government have signalled in the Red Book that they plan to remove the fuel rebate in 2010. That will have no small financial impact: it will prevent the Treasury from losing £550 million in 2010-11, which means that the renewable transport fuel obligation will become the Government’s key fiscal lever for increasing the amount of biofuels blended into the petrol used on roads.
We had a similar debate when the statutory instrument on the renewable transport fuel obligation went through Committee. The Conservatives are concerned that the RTFO does not include fully outlined sustainability criteria at the moment. In fact, my understanding is that the criteria will not be put in place until 2010-11. Will the Minister explain, therefore, why the Government are stepping away from the introduction of two levers with which to encourage biofuels, instead relying on just one, which many people do not think will be strong enough, soon enough? I am sure that we will come on to the issues about the buy-out price in the next amendment, so I shall conclude my remarks for the time being.