Schedule 11
Finance Bill
10:30 am
Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)
This group of amendments probes schedule 11, which amends the rules for the schemes and carves out the three areas of shipbuilding, coal and steel. The explanatory notes to the schedule indicate that the carve-outs have been prompted by EU state aid rules, which specify the circumstances in which aid can be given to those industries. Schedule 11 cites three documents to justify that position: for shipbuilding, the framework published in the Official Journal of the European Union on 30 December 2003; for steel, the guidelines published on 4 March 2006; and for coal, article 2 of “Council Regulation (EC) No 1407/2002”, which was published on 23 July 2002. One question that immediately springs to mind is why the Government have taken so long to implement the regulations, since they have been part of EU rules for between two and six years.
I particularly want to discuss the amendments on the coal industry, which would remove the coal industry from the excluded activities in schedule 11. When I looked at the Council regulation, it appeared that it would still be permissible for aid to be given to the coal industry through venture capital schemes. For example, article 5 of the regulation deals with aid for accessing coal reserves, whereby aid for initial investment can be paid until 31 December 2010. It appears that under EU rules a VCT could invest in a company seeking to open up new coal reserves or exploit existing reserves until the end of 2010. However, the Government, through the changes in the schedule, seek to prevent that. When energy security is an issue—that is referred to in the regulation—we should be considering how best to exploit our domestic reserves. Some hon. Members will doubtless think about the environmental impact of mining more coal, but we currently have coal-fired power stations. Several people are looking to build new stations using clean coal technology. If nothing else, it could be argued that we should mine more coal. Why has coal been excluded from schedule 11 when, according to the Council regulation, coal mining could qualify for aid and it might be possible to encourage VCT schemes to invest in exploiting new or existing reserves of coal?