Clause 14
Finance Bill
1:30 pm
Angela Eagle (Parliamentary Secretary, HM Treasury; Wallasey, Labour)
I must confess to experiencing a slight tinge of envy when the hon. Member for South-West Hertfordshire talked about the great event on the Grand Union canal this weekend. I used to be the Minister responsible for canals. One misses some certain things about one’s previous jobs—certainly being able to leap on a narrowboat and steer it through a few locks, which I did on occasion. I am slightly envious of how the hon. Gentleman will spend his weekend.
I am happy to do my best to answer some of the hon. Gentleman’s perfectly reasonable questions on clause 14. He is right—and I thank him for acknowledging it— that it was not the Government’s wish to be in a situation in which we had to deal with the ending of derogation for such fuel, but we reached the stage at which the European Commission would not allow the derogation to continue.
Clause 14 introduces changes in response to the loss of the UK’s energy products directive derogation and provides for free-standing rate of duty for aviation gasoline which, as the hon. Gentleman rightly said, is known as avgas, with effect from 1 November 2008. It also introduces schedule 6, which makes provision for charging duty on
“fuel used for private pleasure flying or private pleasure craft”
and for a partially-rebated rate of duty on heavy oil other than kerosene, which is a nil-rated oil because it is used for heating—hence the issue of propulsion and heating about which the hon. Gentleman asked.
Under energy tax directive 2003/96/EC, which is also known as the energy products directive, fuel used for pleasure flying and in private pleasure aircraft must be taxed at the full rate that member states charge on the equivalent fuel, and waste oil that is re-used as fuel must be charged with duty at the rate that member states charge on the equivalent heating fuel. The UK held derogations—[Interruption.]