Charge to Aggregates Levy

Clause 16 – in the House of Commons at 4:42 pm on 23rd April 2001.

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Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs) 4:42 pm, 23rd April 2001

I beg to move amendment No. 4, in page 12, line 25, at end insert— '(2A) Prior to the commencement date the Treasury shall publish a scheme of rebates to those persons charged with the levy proportionate to the environmental protection measures employed by that person in the process of commercial exploitation of aggregate, and such a scheme shall have effect on the commencement date.'. The points of order raised by my hon. Friend the Member for Kingston and Surbiton (Mr. Davey) and by the hon. Member for Croydon, South (Mr. Ottaway) are relevant to the debate. A new clause has been tabled that is of direct relevance to the amendment, and common sense would suggest that they should be debated together, but the decision of the business managers means that we cannot discuss the new clause. We are discussing, at best, half the matter under consideration, and there will have to be a further debate in Committee covering very much the same issues; a debate from which, sadly—or perhaps not sadly—I will be excluded, as I will not be serving on the Committee.

The amendment is crucial in terms of understanding the Government's intentions towards the aggregates levy, the effect on the industry and the way in which the House would wish it to proceed. I represent an area where quarrying is a major industry. It does not employ huge numbers of people, but it is significant. The Mendips—particularly the east Mendips—contain some of the most concentrated areas of production in the national limestone industry, so this matter impacts substantially on my constituents.

Living, as I do, in the east Mendips area—not a million miles away from quarries from which some of the largest movements of material in Europe take place every day—I am aware of the pressures on the industry. There are strong reasons for providing the best possible environmental protection for the local areas in the context of national aggregates production. However, there are also strong reasons for recognising that this is an important industry which employs a great number of people locally, if not nationally, and is essential to our national well—being, as it produces—literally—the building blocks of our built environment and infrastructure.

Getting the balance right is important; I struggled with that for 12 years as a member of the minerals planning authority of Somerset county council, when we were dealing with the matter daily. We dealt with new applications and, in the case of interim development orders, with permissions that should have expired. We tried to reconcile the interests of the local community with those of the industry, and came to a reasonably satisfactory conclusion. In the past 15 years we have made substantial progress in finding ways to accommodate the industry, which has responded to the pressures that have been put on it. The industry has sometimes resisted those pressures, but it has also recognised a wider community interest.

As Ministers will know, the aggregates levy has been much discussed with the industry, and it was no great surprise that provision for the levy formed part of the Bill, because it had been announced in earlier statements.

Photo of Mr Allan Rogers Mr Allan Rogers Labour, Rhondda

The hon. Gentleman said that the issue had been much discussed with the industry, but that suggests that the Government listened to what was said. The proposals have not been altered in any way, and my experience of being involved in at least one discussion suggests that the Government have a closed mind on them.

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

The hon. Gentleman pre-empts what I was about to say. Although much discussion has taken place, and the industry—to its credit—has gone a long way towards meeting some of the Government's objectives, its proposals have effectively been rejected and a statutory levy will be applied, irrespective of whether it will do the job that the Government, local communities and, for that matter, the industry, recognise needs to be done. We need to improve local environmental standards and procedures to achieve the best possible result, and that is the issue at the heart of the amendment.

The voluntary proposals suggested represented a good deal for both the Government and the industry. Unfortunately, those proposals were not universally approved within the industry, because—perhaps inevitably—some did not wish to improve their working practices. However, some have already done a good job and were prepared to take on the challenge set by the Government, and to establish a sensible relationship. The Department of the Environment, Transport and the Regions is continuing discussions with the industry and recognises the moves that have been made, but sadly, that view is not shared by the Treasury, which is why we have a largely unchanged proposal that includes a half promise that, at some stage in the future, a rebate scheme will be introduced. In the meantime, the Government will apply the tax irrespective of the consequences for the industry and for local communities.

Photo of Mr Allan Rogers Mr Allan Rogers Labour, Rhondda

I hope that the hon. Gentleman will not continue to use the word "environment" when talking about this tax. He must realise that the tax will not affect the environmental position and that a regulatory framework already exists. This is a money-raising tax, and has nothing to do with the environment.

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

I contend that it is possible to inject into the levy a little element of environmental protection, which it does not possess at the moment. The hon. Gentleman chides me for not being sufficiently aggressive towards Ministers early in my speech, but I wish to set out the proposals as I see them, and then to mention one way of improving them.

Photo of Mr Allan Rogers Mr Allan Rogers Labour, Rhondda

The hon. Gentleman should get it right; I am aggressive not towards my right hon. and hon. Friends on the Front Bench, but towards the tax, which is wrong and ill conceived.

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

Clearly the hon. Gentleman is against the sin, but not the sinner. In my observations I will encompass both.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

I understand the hon. Gentleman's eminently reasonable concern that the details of the rebate scheme should be published before the commencement date of the levy, but why will he not bestir himself one little bit further and make the reasonable demand that the Government publish those details before the passage of the Bill?

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

I am interested not in the passage of the Bill but in the start of this iniquitous tax. I have already voted against it in the Budget debate, so my position is absolutely clear. I am trying to get the Government out of the hole that they have dug—which is perhaps the appropriate analogy in this context. They are making exactly the same mistake as their predecessors made with the landfill tax. The way in which the tax is presented reeks of environmental rectitude, but it does absolutely nothing for the environment and hits the wrong targets.

The great problem with the tax is that it will not work. The amendment would help it to meet at least some of the Government's stated objectives. The tax will not improve the industry's environmental performance or create a more sustainable aggregates supply. The voluntary levy forcefully advocated by the Quarry Products Association and others would have met some of the objectives.

Crushed rock quarries have by-products, exactly as china clay quarries and others that are exempted from the provisions do. There are scalpings, overburden and washings. Scalpings make up about 40 per cent. of the material produced in a limestone quarry, but they have a very limited market. They are used for various jobs, but there is a strict limit to what people are prepared to pay for them.

If scalpings are included in the levy, they will not be sold, and other materials will be used. Indeed, the Government have clearly stated that one of their objectives is that china clay spoil should be used as an alternative. What, though, is to happen to the unsold scalpings, which thereby become waste?

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

Indeed, they could be doubly taxed if they were moved off the quarry.

The scalpings will have to be dumped, either in piles on the edge of the quarry or impacted into the base, which effectively sterilises quality rock lower down and takes up the productive floor of the quarry, to no one's benefit. It is possible to wash scalpings and separate out the clay, but that will not be done if the aggregates levy is applied, because it will be completely uneconomic.

The same applies to overburden, which is a substantial by-product of aggregates extraction—in a basalt quarry, for example, or when much of what is taken out is overlying jurassic oolitic limestone. That has to be taken off first if one is not to sterilise the stone that one wants, and it has to go somewhere. It has low quality uses, but if a levy is put on it, it will have no use and no market.

5 pm

If there is no system of local environmental improvement and no exemption scheme, we shall effectively be removing the white hills in Cornwall that we have all seen and agree should not be there—the moonscape around St. Austell—and replacing them with piles of red earth in Somerset. People will say, "What a shame, Somerset used to be such a beautiful county and look what they have done to it." We will create a wasteland, a moonscape, simply by applying this tax. I do not think that that is the Government's intention, but it is the inevitable outcome of what they propose unless the clause is amended.

With products that are derived from aggregates, there is a strong environmental argument that, given that we need pre-cast concrete products, the best way of producing them is as near as possible to the point of production of the stone. Otherwise, large quantities of stone are moved around the country to concrete works to form pre-cast concrete products that are then moved somewhere else, resulting in unnecessary lorry movements and adding to the environmental cost of the product for no benefit. Yet if the levy is applied in its present form to those added-value manufacturing processes, they will be priced out of the market. Producers in other countries will make those products—and although the Bill imposes a levy on raw aggregate, there will be none on manufactured produce. As a result, it will be non-commercial to use a local by-product to produce locally processed goods, and imports will be sucked in to undercut them, simply because of a misapplication of the levy.

Photo of Oliver Letwin Oliver Letwin Shadow Chief Secretary to the Treasury

Does the hon. Gentleman agree that there are two ways of solving that problem, which is obviously acute if we want to stop 10,000 or so jobs being exported unnecessarily? The Government could adopt either the very wide exemption scheme proposed in his amendment, or our proposal in amendment No. 26, which redefines aggregates in such a way as to eliminate pre-cast concrete from the levy.

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

The hon. Gentleman is right. I know that I would be out of order were I to refer directly to the amendment to which he alludes. However, there are undoubtedly two ways of dealing with the problem. It is a very big issue in terms of potential employment and revenue loss. The estimated cost to the pre-cast concrete industry is £40 million; the levy will represent a 25 per cent. take on its profits. That is an unsustainable process of taxation, and it will simply drive jobs out of the country. There might be an argument for that if the levy achieved the environmental effects claimed by the Government, but it will not. It will have quite the reverse effect: it will be of disbenefit in environmental terms.

Photo of Robert Smith Robert Smith Liberal Democrat, West Aberdeenshire and Kincardine

I emphasise my hon. Friend's point about the disbenefit in environmental terms. Transporting such products will clearly be environmentally damaging to the communities and the environment through which they pass.

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

My hon. Friend is absolutely right. He recognises the problem in his constituency, which has both aggregate producers and a thriving port. It is obvious that we must find other areas of supply.

Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

Does not the most severe environmental damage in many areas result from the transport of the aggregates rather than the digging? Does that not strengthen even further the point made by the hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith)?

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

The hon. Gentleman, too, is absolutely right. Indeed, his point is supported by the research that the Government themselves commissioned into the environmental disbenefits of the quarrying industry. The research found that the main problem was quarry lorries going past people's doors and windows along roads that were never built to accommodate them. That is the aspect of quarrying that people find most worrying—much more so than the occasional distant thud of an explosion that everyone expects anyway, or even the holes in the ground, which are often masked. If the hon. Gentleman came to the Torr works, which is one of the biggest quarries in the country, he would not know it was there until he arrived at the gates, because a great deal of landscaping has been done to ensure that it is not evident. He would, however, be aware of the heavy transport passing through all our villages—not so much from Torr, which has provided a railhead, but certainly from many other quarries. That has a substantial effect on local communities.

Photo of Tom Levitt Tom Levitt Labour, High Peak

The hon. Gentleman makes a fair point about transport, but is he aware that the Government already provide schemes whereby grants can be given to quarry companies to improve rail access, as has happened with great success in some constituencies, including my own?

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

I have just said that the Torr works has a railhead, as does the Hanson quarry at Whatley. Those are very welcome, but the tax could, if designed properly, encourage more companies to have one. In its present form, with no rebate scheme, the levy will discourage companies from taking steps to improve the local environment. There is no competitive benefit for them; indeed, there is no benefit beyond public-spiritedness and a good relationship with their local communities. I fear that the Bill will result in enormous environmental disbenefit in communities such as mine.

Photo of Mr John Burnett Mr John Burnett Liberal Democrat, Torridge and West Devon

Does my hon. Friend agree that many constituencies, including mine, have virtually no railways, but several quarries and utterly unsuitable roads?

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

My hon. Friend is right. It was ever thus, I fear; when I was leader of Somerset county council, the minutes of the council's first meetings were kept in my office, and when I read the minutes of the very first, I found a discussion of the difficulties caused by quarry lorries in the Mendips and their effect on local roads. That meeting was held in 1889, so the issue is of very long standing.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party, Galloway and Upper Nithsdale

Is it not likely that the condition of the roads will be even worse once the tax is imposed, as local authorities, whose budgets will be drained by the tax, will have even less to spend on them?

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

It is an interesting by-product of the levy that the cost will fall heavily on local authorities, which will be trying to repair the infrastructure damaged by heavy transport.

We were touching on the issue of employment loss in the concrete industry as a result of these measures. There is the same potential in the quarrying industry itself. The Government estimate that the introduction of the levy will reduce demand for aggregate by 10 per cent.—although, interestingly, not demand for the highest grade aggregate, which is the main driver of a quarry's output. The reduction will be in demand for the lower grade aggregate, and will have little direct financial benefit in terms of the demand for new permissions. At the same time, the changes in specification will increase costs for the primary producers. As a result, cost-saving will be achieved only by passing on costs to local authorities, or by reducing the number of people directly employed in the industry.

The Government's claim for the tax is that the surplus will go into a sustainability fund. That was the way in which it was originally sold to local communities in quarrying areas. They were told that it was a great idea because some money would be taken out of the quarrying industry and put into making their local environment better. However, the proposals and the responses to the consultation on the sustainability fund do not for one moment suggest that communities local to the quarries will benefit.

I have a great deal of time for the notion that something should be done about St. Austell, which is in the constituency of my hon. Friend the Member for Truro and St. Austell (Mr. Taylor). If money is available to do something about the China clay spoil tips, no doubt he will welcome it. However, to sell that as a direct benefit to communities affected by quarrying in Somerset is stretching the tail a little further than may be appropriate.

When the Government's own press release of 25 August states that local communities affected by quarrying are set to benefit from environmental improvements, I have to question the good faith of those proposals. Those benefits are not in the draft proposals. Indeed, the draft seems to ignore the responses of the minerals authorities directly affected. I know that the Financial Secretary to the Treasury has received a letter from the minerals planning forum of Somerset county council stating that in terms. It appears to the forum that the views of Somerset, of Derbyshire and of Leicestershire—the key aggregate producing areas, which between them produce almost half of England's crushed rock aggregates—have been almost completely ignored in the proposals for the administration of the sustainability fund. There is a real suspicion that, in relation to their economies and the quarrying industry, much more will go out of those areas than will come back.

That is why a rebate scheme would be of direct benefit. Such a scheme would actually specify the local environmental improvements to be undertaken by the quarrying companies, and would give them a direct commercial advantage for having done the things that we all want to be done. Indeed, the industry itself has argued strongly for that. I do not want to put words into the industry's mouth—it is clearly against the concept of an aggregates levy in toto—but having accepted that it is the Government's intention to impose such a levy, the industry is saying, in effect, "Let's have a sensible rebate scheme, and let's have it before the tax starts to operate."

As the Financial Secretary will know, one suggestion made by the Quarry Products Association is that a benchmark might be a formal environmental management system such as IS014001. That is one suggestion among many, but it would provide a framework whereby some of the benefits from the imposition of the tax would directly accrue to the communities affected; it would bring the benefits home. That sensible objective should commend itself to hon. Members on both sides of the House; indeed, I suspect that the proposal represents what the Government will eventually do.

Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

That objective is the only reason for suggesting it.

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

I agree absolutely.

5.15 pm

My principal quarrel today is with the fact that, for reasons that escape me, the Government are going ahead with a commencement date for the aggregates levy without having in place the main objective—some may say the subsidiary objective—of the local environmental rebate, which would make the levy work in favour of local communities and drive down the environmental costs, as well as avoiding an increase in the commercial costs to the companies involved. That would be put right by amendment No. 4—in combination with new clause 1, which we are not allowed to discuss now, but which will be debated in the Standing Committee.

Photo of Edward Davey Edward Davey Shadow Minister (Olympics and London), Shadow Spokesperson (Treasury), Liberal Democrat Spokesperson (Treasury), Liberal Democrat Spokesperson (Olympics and London)

My hon. Friend is making a powerful speech. Will he elaborate a little on the type of environmental protection measures that he wants to be included in his rebate scheme? In particular, he referred to the environmental damage done to local communities by the noise and dust from the lorries that carry the aggregates. Does he want his scheme to include measures to tackle that problem, or should it be dealt with by separate regulations?

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

My hon. Friend is right to suggest that some things are susceptible to regulation, but having wrestled with the problem for more years than I care to remember, I can tell him that it is very difficult to do by regulation all that is required. An incentive is needed for the companies to take the measures that they know they should implement if they can, because it is sometimes commercially impossible for them to do so. There is an obvious difference in attitude between the companies that take their responsibilities seriously—very often, those are the bigger companies—and those that do not. There is no "big is bad and small is good" argument here; it is often the other way around in this context.

Many of the companies are prepared to develop the infrastructure that makes a difference. Railheads were mentioned earlier, and they make an enormous difference. If a large quantity of stone can be moved by rail from Somerset to Surbiton—which is done every day—a vast number of lorry movements in inadequate lanes are prevented, which makes a big difference to local communities. If reinstatement schemes are properly funded and made to work, a huge difference is made to the use to which the quarry is put after production.

Many quarries use old permissions, which were granted in terms that no responsible planning authority would use at this stage in the game. Those companies will respond if they are given an incentive to implement all the measures that they could, if they could afford them, and if they are not commercially disadvantaged by doing so. Their proposals show that they are willing to respond. I find it inexplicable that, because of some form of misplaced machismo, the Government are determined to go ahead with the levy without including the necessary rebate structure, which I am proposing. The rebate would make a huge difference to the effectiveness of the tax in terms of its environmental benefits, and I commend it to the Committee.

The Chairman:

May I remind the Committee that there is a limited amount of time to debate such matters, and it would be helpful if hon. Members had regard to the fact that other colleagues wish to contribute? This is not a stand part debate, and although it has ranged reasonably widely until now, it cannot be expanded into a stand part debate. Hon. Members who want to contribute to a stand part debate should bear that fact in mind in making contributions on the amendment.

Photo of Mr Allan Rogers Mr Allan Rogers Labour, Rhondda

I have a little knowledge not of the taxation system, but of aggregates. I support all the Government's efforts in raising and spending taxes in a very positive way. My constituents and many poorer areas of the country have certainly benefited enormously as a result of the Government's financial and economic policies.

I shall not support the rebate suggestion in the amendment, because it merely tinkers with the central issue that the Committee must address. From what to what will the rebate be made? If the Government cannot get the sustainability fund that arises out of the taxation together in a proper way, I do not understand how any form of rebate system can be of specific benefit to the industry.

We are debating not a criminal activity, but an industry that is fundamental to the economy of this country. Mineral development goes back to pre-history and the Wealden area and East Anglia contain superb examples of the restoration work that can take place after the mineral workings have gone. Such areas are now popular holiday resorts.

Up until the industrial revolution and through to the present time, minerals have done much for the life of this country. I am sure that you, Sir Alan, got out of bed this morning in a house that was built of lovely sandstone or limestone, that you stepped out on to a path that was made of aggregates that had been extracted, and then on to a road that was also made up of aggregates. You may have even got on to a train that ran on metal that had been extracted from the earth and on a track that was bolstered by the aggregates that underlay the rails. Wherever we are and whatever we do, we desperately need to extract minerals from the earth.

I certainly accept that, for years, extraction took place in not too nice a fashion. For example, the china clay pits near St. Austell in Cornwall brought a great deal of wealth and industry to the area, but they are considered scars on the landscape by people who do not appreciate them properly. I come from an area in which there were 63 coal mines and where there was much exploitation and dumping of colliery spoil. Much of that land has now been landscaped and is used in a practical way.

Photo of Mr Allan Rogers Mr Allan Rogers Labour, Rhondda

No, I will not because of the shortage of time.

The aggregates tax is a tax on a vital industry, and it will not serve the purpose that the Government suggest that it will. My quarrel with them is not that they are taxing as such, but that they are presenting this tax as an environmental tax.

About eight or 10 years ago, I remember sitting down with some of my colleagues when the Labour party was in opposition. One of our environmental spokesmen was terribly excited about a meeting at which a representative of Friends of the Earth had said that the extraction of material in a certain place would destroy the water table. When I had a proper job I was a geologist, so I must confess that I was a little confused and wondered how the water table could be destroyed by extraction. However, at the end of the discussion I turned round and said, "I hope that we will have a minerals policy that is not based on the views of the last lobby group to whom our spokesman talked." I fear that that has happened with this tax. It originated with a lobby group and has been dressed up even though there is no way in which it is an environmental tax. If Ministers have been convinced by their advisers or by the political input that has gone into the Department that it is an environmental tax, I am very sorry that that has happened.

Although I accept that some people may not extract minerals in the best possible way, the industry is doing a good job because it has been regulated. Planning regulations are the way to improve the environmental standards for extraction and restoration work. If the industry does not conform to those regulations, the offending companies should be shut down. However, nearly all the companies that I know of extract in a principled manner and are only too anxious to restore. The national water sports centre in Nottingham is a classic example of effective restoration after mineral extraction. It is not necessary to tax the industry to get it to behave properly, because it is already doing that. Quarries in my area have been used for recreational activities. Companies such as Foster Yeoman—I do not know whether it operates in the constituency of the hon. Member for Somerton and Frome (Mr. Heath)—do superb restoration work. I recommend the books that it publishes, such as "Wildlife after Gravel".

The tax is hypocritical. If money is to be raised, let it be done practically. Although not a concern for my constituency at the moment, most mineral extraction takes place in rural areas and is often the only alternative to farming. It provides much ancillary employment in the haulage industry and other businesses that supply the quarries and quarry extractors. A tax on the industry is a tax on jobs. I cannot envisage it improving the environment. The only way to do that is to impose tight planning controls, planning regulations and planning enforcement on mineral extraction.

Photo of Mr William Ross Mr William Ross UUP, East Londonderry

The hon. Member for Rhondda (Mr. Rogers) said that the tax was a tax on jobs, but it is more than that: it is a tax on the cost of a house because a considerable amount of aggregates goes into building a home. Although I hope that we will have time to debate amendment No. 24, which relates to Northern Ireland, I shall concentrate on amendment No. 4, which refers to rebates to those persons charged with the levy". The problem is not the detail of the tax, but its imposition. Much of what will be said will focus on its effect on the economy in general. Many people will not think that the tax matters to them individually, but it will ensure an increase in the building costs of every house. An average-sized dwelling uses about 80 tonnes of building sand, 200 or 300 tonnes of hardcore and concrete bricks and blocks. That is a considerable weight and adds up to a lot of money. I estimate that the tax will place a hidden extra cost in tax alone of much more than £1,000 on the smallest house and £2,000 or £3,000 on a larger dwelling.

We are driving up the cost of housing, and the tax will translate into a tax on all houses sold. The increase in the cost of new dwellings will increase the price of existing dwellings. When the Government consider the effect of the tax on road building, they might say, "It doesn't really matter. It's being recycled back to us in one form or another", but that is not the point. Everyone who uses aggregates in buildings and road construction puts on a percentage and the total sum at the end of the cycle will be much larger than the initial tax.

5.30 pm

I am aware of, and sympathetic to, the many valid arguments against the tax which will be made in the debate and to many of us individually. The Government's arguments for introducing it are pathetically weak. It has nothing to do with being green; it is simply a revenue-raising exercise that will do far more harm than good. The industry will not have significant revenue returned to it by any other means, so the tax is clearly not revenue neutral.

The tax will not increase recycling. By and large, where it is possible to recycle materials, people will do so. The resources are finite, and so is the capacity for recycling. Substantial recycling is already being carried out and is economically viable. Without this tax, we could and would go on recycling as much as possible throughout the country. The tax is not environmentally friendly because there is no disincentive for the primary producer who removes material from the ground. He is driven by demand from other industries.

Once again, unfortunately, it is the peripheral regions of the United Kingdom that will suffer most from the tax. In Northern Ireland, in particular, the burden will be compounded by factors that do not impact on the industry in the rest of the United Kingdom. In a letter dated 31 October last, the Financial Secretary to the Treasury said: These costs will be significantly higher for the transportation of concrete blocks, as these have to be handled by a specific type of truck. Taking the levy rate of £1.60 per tonne and even assuming transport costs are no greater than 10 pence per tonne mile, it would appear uneconomical to transport the processed aggregate more than … 16 miles. Estimates from the industry in Northern Ireland show that it would be easy and viable to transport aggregates and their products up to 25 miles, so at least 50 per cent. of Northern Ireland is within range of the frontier, and there is no tax in the Irish Republic.

Apart from the low value of aggregates in Northern Ireland and the distribution of the industry there, we must remember that it is the only region of the UK that shares a large frontier with another state. If the Financial Secretary examines the matter a little more closely, he will realise that such a tax was considered by other EU states and rejected, as it was confidently predicted that the aggregates industry would collapse in countries such as Holland and France. In Great Britain, the effect of the tax is masked to some extent by the fact that all imported aggregates come by sea, so it is easy to control the taxation of material at ports. However, aggregates can simply be put on a lorry and driven across the frontier into Northern Ireland. It is a different ball game.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

Further to the point that I put to the hon. Member for Somerton and Frome (Mr. Heath) earlier, does the hon. Gentleman agree that his fear of an especially adverse impact of the tax on the people of Northern Ireland serves further to underline the necessity of publishing the details of any rebate scheme not merely before the commencement date of the tax, when it will too late to debate them, but before the passage of the Bill itself?

Photo of Mr William Ross Mr William Ross UUP, East Londonderry

The hon. Gentleman is perfectly correct, and I hoped that the Government, who place so much stress on transparency, would be more than willing to produce all the facts and figures and the details of the research that has been carried out. They have lamentably failed to do so up to now. Those of us who have talked to the industry in Northern Ireland take the view that much, if not all, of the regional aggregates industry will suffer grievously as a consequence of the tax.

The House knows as well as I do that the Government are not averse to granting regional tax exemptions that they consider necessary—for example, the exemption from air passenger duty for travel between the highlands and islands and mainland Scotland. I think that a similar exemption should have been granted for travel to Northern Ireland. I travelled here today by air and will return home in a few days by air, just like almost everyone else who travels in and out of Northern Ireland. Sea transport of human cargo is far less prevalent now than it used to be. Exactly the same argument applies to Northern Ireland as applies to the highlands and islands—however, that is a debate for another day.

The Government have demonstrated a certain pragmatism in their approach to regional problems—the problems of being on the periphery of the kingdom—so they should have demonstrated the same pragmatism when considering the imposition of the aggregates levy in Northern Ireland. It is estimated that the industry there is worth about £35 million in tax to the Treasury. That estimate is based on the 1999 figure of 23 million tonnes of aggregates, of which 22 million tonnes would be taxed under the proposed scheme. However, it has been estimated that the imposition of the tax would cost 4,000 jobs—70 per cent. of those employed in the industry in the Province—and that it would cost the Treasury £60 million. The deal does not strike me as a good one.

The majority of the jobs in the industry are not in extraction, but in the value-added end of the process; however, the value-added end can easily migrate to the Irish Republic—indeed, some has already done so. Raw products would continue to be extracted in Northern Ireland, but they would be taken across the border to be refined or processed, usually into concrete products, and then returned to Northern Ireland, thereby escaping most of the duty—I understand that there is no tax on imported downstream products. Therefore, the environmental tax might result in up to three times more lorries on the roads of Northern Ireland, bringing the value-added products into the Province, as well as the loss of jobs in concrete manufacturing. The issue is extremely serious to those in Northern Ireland.

In addition, it must not be forgotten that the average value of raw aggregates is £2.60 a tonne in Northern Ireland, whereas the average value in Great Britain is £6.50 a tonne. Translating the proposed tax into a percentage of value, it would be a 60 per cent. tax in Northern Ireland, but only a 25 per cent. tax in Great Britain. That disproportionate burden presents an extremely serious problem that the Government should address.

In previous Budgets, the Government have demonstrated in small ways their willingness to consider the problems of those who are on the periphery of the kingdom—the air tax is one example. I can think of a few suitably pragmatic solutions to the obvious problem arising from the aggregates tax. I do not know whether the Government have carried out a thorough analysis of the impact on the industry in Northern Ireland—I shall not embarrass Ministers by asking—but to my knowledge none of their research was conducted in the Province, and I dispute the mythology of the contingent valuation system. I seek some rational consideration of the impact that one-way cross-border trade will have on the economy and job prospects in Northern Ireland. The Government should give at least some assurance that they will consider that problem.

It would be possible to exempt the Province from the tax and for the Treasury to make a net saving in the process. As a lesser evil, the Government could impose the tax at a rate that fairly reflects the lesser value of raw aggregates in Northern Ireland; that could be done by setting it at a lower rate, or introducing it as a percentage of product value. The Government could at least tax imported value-added products. Those are real options and I urge the Government to consider using them to protect the industry in Northern Ireland while there is still an industry there to protect.

Over the years, I and other Northern Ireland Members have uttered clear warnings about the effect of the steadily increasing tax on fuel. The Financial Secretary knows perfectly well about the consequences of ignoring those warnings with regard to Northern Ireland, and about the enormous loss to the Treasury that is associated with fuel smuggling, racketeering and thuggery of all sorts. Interestingly, since foot and mouth reared its ugly head, the amount of smuggled fuel seems to have fallen rapidly and has stayed down. People now seem able to seal the border to stop foot and mouth disease getting across, even though they could not seal it to stop murderers crossing. However, I let that go, as it is also a matter for another day.

The Government have a chance to consider seriously the tax before it comes into operation, and they should give favourable consideration to the impact that it would have in the regions and, in particular, in the Province that I have the honour of representing. They must consider what will happen, unless they can achieve the miraculous feat of persuading the Republic of Ireland Government to introduce the same tax in the Republic, which would put us all on a level playing field. At the end of the day, that is all that we want, but we do not currently have it. The tax impacts differently with in Great Britain and impacts on Northern Ireland in particular, but it is a bad tax anyway.

Photo of Tom Levitt Tom Levitt Labour, High Peak

A few weeks ago, The Mail on Sunday described me as sycophantic. Obviously, it had never heard me talking about aggregates tax. I am co-chairman of the parliamentary minerals group and a member of the GMB, which is the largest trade union in the quarrying industry. The Quarry Products Association was launched in my constituency in 1997. Quarrying is the largest single part of the manufacturing industry in High Peak, which has nine major quarries and many smaller ones. I lay some claim to the second runway at Manchester airport, all 2 million tonnes of which used to be located in my constituency, but were transported by rail to the site.

In the quarries of High Peak, we have some of the best environmental practices that are used in quarries today. We have some massive quarries that are practically invisible to the outside world. Blue Circle at Hope takes some 70 per cent. of its product out by rail rather than road, and always stays one leap ahead of the law in terms of environmental emissions and so on. Some very good practices are followed not only by Blue Circle, but by Tarmac—formerly Buxton Lime Industries—RMC and Lafarge. The big names are all represented in the area, but unfortunately, so are some of the worst. In particular, a quarry at Moss Rake, next door to Blue Circle, is a disgrace. I shall say more about that very small, but highly visible, quarry in a few moments.

My views on aggregates tax in general are well known to the Department of the Environment, Transport and the Regions and the Treasury. My hon. Friend the Financial Secretary and I have spent many happy hours debating the issues either publicly or privately. I have tabled parliamentary questions and led delegations in relation to the matter on behalf of the all-party minerals group. I am a sceptic about the aggregates levy, which is why I think it right to consider carefully the possibility of introducing a rebate scheme. That does not lead me to conclude that I shall vote in favour of the amendment, for reasons that I shall explain in a moment, but I think the tax needs improving.

Photo of Oliver Letwin Oliver Letwin Shadow Chief Secretary to the Treasury

Will the hon. Gentleman tell us whether he will vote against the clause?

Photo of Tom Levitt Tom Levitt Labour, High Peak

I shall say exactly which way I shall vote, but the hon. Gentleman will have to wait for that moment to arrive. [Interruption.] I shall not change my position between now and a few minutes' time.

Let me say why the tax needs improving. I believe that it is based on a very narrow and controversial definition of costs and benefits. It does not discriminate between existing good and bad practice. It makes the assumption that it is only improvements on the current state of play that will be taken into account. Contrary to some claims for it, I do not understand how the tax promotes recycling.

5.45 pm

Contrary to the comments of the hon. Member for Somerton and Frome (Mr. Heath), the landfill tax accelerated a move towards recycling. The investment of many companies in recycling building materials, the fact that some parts of the country have a greater demand for materials while others have a greater supply, and transport costs that can militate against using recycled materials, even when companies want to, all mean that the industry is already reaching its maximum capacity for recycled materials. The supply of recycled materials is not available in the right place and at the right time to enhance further use, even if an aggregates tax provides an incentive.

The industry remains unconvinced about the operation of the sustainability fund. I suspect that those who tabled the amendment wished to replace the tax or at least complement it with a system of rebates. At least the sustainability fund has the advantage of being proactive, whereas a rebate scheme would presumably only react to changes. The industry—certainly the Quarry Products Association—is well aware of its responsibilities.

Nowadays, the industry cannot and must not ignore environmental interests and progress. Quarries are part of and integral to their neighbouring communities, where many of their employees live. The industry recognises that, and the fact that a clean reputation is commercially and hence economically a good asset for quarries. Good practice already exists in environmentally sound quarrying. We must not pretend that it does not, or fail to reward those in the industry who have got their act together in the past and produced some excellent environmental measures.

Over the years, the Quarry Products Association has presented arguments on behalf of the responsible elements of the industry. However, its strategy has a major flaw. It accounts for only 80 or 90 per cent. of the industry. The remaining 10 per cent, which, by and large, comprises the smaller operators who may be represented by the British Aggregates Association, and, more importantly, those represented by nobody, do the most damage to the environment and the industry's reputation. The hon. Member for Croydon, South (Mr. Ottaway) nods. It is therefore odd that the amendment that he has tabled in the next group would exclude such cowboys and smaller operators from the Bill.

Photo of Richard Ottaway Richard Ottaway Shadow Spokesperson (Treasury)

I was nodding because I believed that the hon. Gentleman said that small quarries were environmentally effective. We believe them to be so.

Photo of Tom Levitt Tom Levitt Labour, High Peak

I invite the hon. Gentleman to the Peak district where he can compare large and small quarries. Planning regulations are tighter in national parks than elsewhere, but he will find that the worst offenders, who are prepared not only to leave an unacceptable scar on the landscape but to raise two fingers to health and safety regulations, are the smaller operators. I do not want them excluded from the Bill. However, that is covered in the next group of amendments.

Photo of Tom Levitt Tom Levitt Labour, High Peak

If the hon. Gentleman has something to say about my comments rather than about the next group of amendments, I shall give way.

Photo of Richard Ottaway Richard Ottaway Shadow Spokesperson (Treasury)

I rise because I do not believe that we shall reach the next group of amendments. The point behind them is that the smaller quarries are in rural areas. They are environmentally effective because they are dotted around the country—

Photo of Dr Michael Clark Dr Michael Clark Conservative, Rayleigh

Order. We cannot debate the next group of amendments simply because the hon. Gentleman believes that we will not reach it. [HON. MEMBERS: "The hon. Member for High Peak (Mr. Levitt) is talking about it."] If the hon. Gentleman does that, I shall check him.

Photo of Tom Levitt Tom Levitt Labour, High Peak

I will not go further on the question of smaller quarries. I shall do precisely the opposite, in saying that one of the quarries in my constituency, at Tunstead, is visible from the moon. It has the largest quarry face in Europe and is in a very rural area.

I return to my conclusion. Let me not give the impression that the Government have not been listening. I disagree with those hon. Members who have suggested that they have come up against a brick wall. There has been no such brick wall. Certainly, £1.60 a tonne is less than the amount that it had appeared might be introduced, and imported aggregates being subject to the same levy is an improvement on the original proposals.

The fact that there are many exemptions will also be welcomed by many industries and many parts of industries, although the provisions could be incredibly complex because quarries such as the Tarmac quarry in my constituency produce materials that might be subject to the aggregate tax in certain circumstances but not in others—perhaps if they were dirty but not if they were clean—and might be subject to it at some time in their life but not at others.

Photo of Tom Levitt Tom Levitt Labour, High Peak

I want to draw to a close so that others can speak.

It is significant that a rebate system of some sort—I do not know what—is, I believe, being discussed by the Government and the major representatives of the industry, those whom I call the responsible elements of the industry. A rebate system must take into account good practice and the current records of the companies. It must encourage progress on environmental measures and apply to the whole of the industry to be affected by the tax. However, I do not think it essential—this is the key—to include such a rebate scheme in the Bill. The sustainability fund is in the Bill, and because how it will be used is not defined, it will be able to be used in a way that could include a rebate system.

Photo of Tom Levitt Tom Levitt Labour, High Peak

I want to conclude, if the hon. Gentleman will excuse me.

I voted for this part of the Budget, and I shall vote for the Bill at the end of the Committee and on Third Reading, however much I think there are opportunities for improvement. The amendments before us today are at worst mischievous and opportunist, and at best—as in this case—premature and, hopefully, unnecessary. That is my objection to the amendment under discussion.

It is three years since the aggregates tax was first suggested, and a year before it is to be implemented. Now that the basic arguments against the levy have been lost and the Government have the backing of the House to proceed along the lines that they are, this is not the time to rock the boat. It is the time to tell Ministers that the tax is unpopular with large sectors of industry and the work force. The proposal assumes a starting point that all quarries are equally bad; it promises much to the green lobby without providing the capacity to deliver; and it is far from complete in terms of being a genuine and fair package of measures to balance the legitimate concerns on both sides of the debate. However, the opportunity for correcting those issues is still there.

The way in which the sustainability and environmental clauses relating to the aggregates tax will be implemented will be an essential factor in the way the Government's environmental record is seen. It is important to have a very strong environmental element in the Bill, and in the levy. We must recognise and reward those parts of the industry that have already gone down that road. Without my full enthusiasm, but in opposition to the amendment and in support of the Government's position, I hope, on balance, that the Minister will take the opportunity to redouble his efforts to find an environmentally acceptable way forward in co-operation with the industry.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party, Galloway and Upper Nithsdale

Unlike other Members who have spoken this evening, I do not have any significantly large quarries in my constituency. However, there is a fair number of small quarries, all of which are run by large operators. The small number of jobs that those quarries provide is important in the rural context, in which it would be significant to lose even half a dozen jobs in a small village or town.

The amendment deals with environmental protection, which is a worthy objective. However, in my four years in the House, I have not had a single complaint from any of my constituents about any of the quarries operating in my constituency. They are carrying on blithely unaware that their environment needs protection from the quarries in their midst.

In terms of the amendment, it seems eminently reasonable that if protection measures have been taken, are being taken, or are to be taken in future, there should be some rebate to compensate the companies for so doing. However, if protection has to be put in place and measured, we need something against which to measure it. We need to be able to assess the damage that has allegedly been caused—or could be caused—by the quarries.

Initially, when I heard about this tax, I thought, in my naïveté, that some assessment or measurement of the damage being caused had been undertaken. It was only after some probing that I came across the measurements to which the hon. Member for East Londonderry (Mr. Ross) referred, relating to the environmental costs and benefits of the supply of aggregates, which are, in effect, a glorified opinion poll asking people how much they would pay to have the quarry on their doorstep taken away.

That reminds me of how people are asked how much they would pay for organically produced foods in their supermarkets. Of course, when they go to the supermarkets, they do not, by and large, pay the extra money for such goods. They simply take the goods that represent the best buy. That is perhaps what we should be doing with aggregates, rather than listening to this sort of nonsense. Incidentally, no survey was ever undertaken in my constituency. None of my constituents was ever asked whether they felt that any environmental costs were being inflicted on them. In fact, only two quarries in the whole of Scotland were surveyed, and—as we heard earlier—none in Northern Ireland. It is nonsense to base any way of assessing environmental damage or environmental protection on such measures.

The small local quarries to which I have referred produce mainly for local consumption. The aggregates produced in my constituency are not trucked long distances, except perhaps within the constituency itself, because it is more than 100 miles long and about 100 miles wide. If those quarries were closed, the product would have to be brought in from elsewhere, at greater cost to the environment. That cost would not be measured, and nothing in the Bill would prevent it.

Where there will be environmental benefits, we should help them. However, the best protection for such benefits in my constituency would be to keep open the quarries that are currently producing there. The best way to protect the environment would be to scrap this tax. The second best way might be to pass the amendment.

Photo of Edward Davey Edward Davey Shadow Minister (Olympics and London), Shadow Spokesperson (Treasury), Liberal Democrat Spokesperson (Treasury), Liberal Democrat Spokesperson (Olympics and London)

If the hon. Member for High Peak (Mr. Levitt) was not guilty of sycophancy today, he was certainly guilty of casuistry in developing his case. He also made an error in saying that provision for the sustainability fund was in the Bill. It is not, and that is why the amendment—and new clause 12, tabled by my hon. Friend the Member for Somerton and Frome (Mr. Heath), which we shall debate later—are so important.

The Liberal Democrats believe that the acceptability of the aggregates levy might live or die by whether an environmental protection scheme and a rebate scheme are incorporated in the provision at the same time. That is what the Government promised. Indeed, in the Red Book of March this year, they reiterated the promise that the rebate scheme would be introduced at the same time as the levy. Yet we are faced with a Bill that contains no such scheme.

We have been told, when the Minister went before the Environmental Audit Committee, that the Government are finding such a scheme very complex, and difficult to design. What faith are we supposed to have in the Government if they state so openly that they are having problems drawing up such a scheme? Can we believe that they will produce one? Until they do, the aggregates levy should not be allowed to commence. That is why the amendment is so important.

6 pm

Photo of Robert Smith Robert Smith Liberal Democrat, West Aberdeenshire and Kincardine

Is it not very damaging to the cause of any environmental debate that the Government should be cynical enough to be seen to introduce a tax that purely raises money for the Treasury, when they have not worked out how to give the money back?

Photo of Edward Davey Edward Davey Shadow Minister (Olympics and London), Shadow Spokesperson (Treasury), Liberal Democrat Spokesperson (Treasury), Liberal Democrat Spokesperson (Olympics and London)

I am grateful for that intervention, which brings me to my next point.

Time and again, Governments—Conservative Governments, and the current Labour Government—have introduced environmental taxes saying that they will give the money back, and have then not fulfilled the pledge. That is indeed very damaging to the cause of the environment. It undermines the faith of consumers, both individual and corporate, who, when they hear future Governments talk about environmental tax, will think, "Oh yes—here comes another revenue-raising measure." It also undermines the whole case for environmental taxation, which is very strong if the policy is implemented properly. I do not believe that the Government are implementing it properly in this instance. Introducing the tax without a rebate scheme is bad politics; it is also bad economics.

I support the amendment. My hon. Friend the Member for Somerton and Frome spoke with great authority; I think that those who read the report of this debate will be impressed by his grasp of the detail, and the Committee is indebted to him.

Photo of Oliver Letwin Oliver Letwin Shadow Chief Secretary to the Treasury

I intend to speak for approximately 30 seconds, owing to the constraint imposed by the ridiculous way in which the timetable motion was proposed.

I agree, broadly, with nearly all that has been said by Members on both sides of the Committee about the desirability of an amendment of this kind if we are to have clause 16 at all, but I shall reserve virtually all my remarks for the extreme desirability of not having the clause in the first place. I shall therefore forgo my opportunity to rehearse all the arguments that have already been advanced so pellucidly.

Photo of Stephen Timms Stephen Timms The Financial Secretary to the Treasury

I shall be brief and confine my observations primarily to the points made in the amendment, although we have had a rather more wide- ranging discussion. I hope that we shall have further debate once the amendment has been dealt with.

I do not accept Opposition Members' complaints about the arrangements for the debate. It was Opposition Members who said that they wanted two days' debate on the Floor of the House, and those two days have been provided. They also said that they wanted to discuss the aggregates levy, hydrocarbons and income tax, and all those topics will be discussed over the two days.

The hon. Member for Kingston and Surbiton (Mr. Davey) suggested that there should be a debate on new clauses at this point, but debates on new clauses always take place at the end of Finance Bill debates. That is not a feature of the timetabling arrangements; it is a long-standing arrangement in itself.

Photo of Stephen Timms Stephen Timms The Financial Secretary to the Treasury

I will, but I want to be brief, given the other matters on the agenda.

Photo of Richard Ottaway Richard Ottaway Shadow Spokesperson (Treasury)

I shall certainly be brief.

The Minister was present for my point of order at the beginning, when I pointed out that the instructions on procedures of the House written by the Clerks made it clear that new clauses could be debated on the Floor of the House.

Photo of Stephen Timms Stephen Timms The Financial Secretary to the Treasury

In the case of Finance Bills, new clauses are taken at the end of the proceedings. That has always been the case.

The hon. Member for Somerton and Frome (Mr. Heath) made a number of wide-ranging points about, for instance, scalpings and pre-cast concrete blocks. As both issues are dealt with in later amendments, I shall not go into detail now. He also talked about the Quarry Products Association package. At the time of last year's Budget, we had got as far as a proposal that was not supported by a significant proportion of the industry, and that was likely to be open to legal challenge from those in charge of smaller quarries who objected to the package. Because the package was not viable at that stage, we decided to proceed with the levy.

The levy will directly help to address issues raised by the hon. Gentleman and others, in three ways. It will ensure that the price of aggregates reflects the environmental costs of obtaining aggregates through quarrying; it will give an additional price advantage to recycled aggregates; and it will provide resources for a sustainability fund.

Photo of Mr Allan Rogers Mr Allan Rogers Labour, Rhondda

My hon. Friend said that the levy is partly intended to cover the environmental cost of extraction. Can he quantify that environmental cost, say, per tonne?

Photo of Stephen Timms Stephen Timms The Financial Secretary to the Treasury

I can indeed. The environmental costs and benefits of aggregates have been the subject of extensive research published by the Department of the Environment, Transport and the Regions, which my hon. Friend may not have had a chance to see. It is probably the most authoritative study of its kind in the world. As the hon. Member for East Londonderry (Mr. Ross) said, it is a contingent valuation methodology study. It concludes that the average environmental cost is £1.80 per tonne. We have taken a prudent and cautious view, and gone for a levy of £1.60 per tonne.

The third way in which the levy will help directly to address the issues relates, as I said, to the sustainability fund, which will deal with the impact of quarrying in the communities that are affected. Initially, it will amount to £35 million a year.

The hon. Member for Somerton and Frome feared that some responses to the consultation had not been taken into account in the consultation summary. Owing to difficulties, some submissions, including the one from Somerset that he mentioned, did not reach officials in time to be included in the summary. However, I can reassure him that all responses received, including those received after the deadline, will be taken fully into account in decisions on how the sustainability fund will be used, and that those decisions will be announced in due course.

My hon. Friend the Member for Rhondda (Mr. Rogers) argued that there should be further regulation. The Government are considering revising mineral planning guidance to improve the sustainability of quarrying for aggregates, and to reduce further the environmental impacts of extraction, but it is right to address cost issues as well. He spoke of a tax on jobs, but this is the opposite: the package will use the proceeds primarily to reduce employers' national insurance contributions, thus reducing the tax on jobs.

The hon. Member for East Londonderry suggested that the package was not revenue-neutral, but it is, for the very reason that I have just given. The proceeds of the levy will be used to reduce employers' national insurance contributions, and also for the sustainability fund. This is not a revenue-raising measure for the Treasury; there will be no net benefit for the Treasury.

Photo of Robert Smith Robert Smith Liberal Democrat, West Aberdeenshire and Kincardine

Does the Minister accept, however, that the package is in no way region-neutral? The charge will be levied in areas containing quarries, but the money will not necessarily go back to those communities.

Photo of Stephen Timms Stephen Timms The Financial Secretary to the Treasury

Certainly, the levy will not be neutral for particular communities, but it will be neutral nationally. It has been suggested that this is a revenue-raising measure; I simply wanted to point out that it is, in fact, revenue-neutral.

The points about Northern Ireland raised by the hon. Member for East Londonderry will be dealt with in a later debate, but I will say now that I was pleased to hear from him that the incidence of fuel smuggling across the land border had fallen. Hon. Members will want to raise other points about Northern Ireland when we reach the relevant part of the Bill.

The hon. Gentleman suggested that other countries were not proceeding with levies of this kind. That is not the case: there are already aggregates levies in France—one of the countries that he mentioned—Sweden and Denmark. I understand that the Netherlands is proceeding with the proposals that it has drawn up.

My hon. Friend the Member for High Peak (Mr. Levitt) has taken a close interest in the matter. As he said, we have discussed it in a lively way on a number of occasions. Recent research published by DETR indicates that there is significant scope for additional use of recycled aggregates. The figures show that about 22.7 million tonnes of recycled aggregates are being used a year and that another 12.7 million tonnes have potential for recycling, so over half as much again is available. There is therefore a good deal of mileage in improving the price attractiveness of recycling in the way that the levy does. The figures that I have referred to do not include the use of china clay spoil, to which the hon. Member for Somerton and Frome referred, so there is a lot of scope there.

The amendment seeks in effect to delay implementation of the levy to allow development of a rebate scheme under which persons responsible for subjecting aggregate to commercial exploitation who undertake environmental protection measures would benefit from a rebated rate of aggregates levy. That is rather narrower than a number of the points that the hon. Member for Somerton and Frome made. The proposal is that the amount of the rebate would be proportionate to the extent of the environmental improvement measures.

We indicated in the Budget that we were attracted in principle to applying a lower rate of levy to aggregate extracted from quarries with the lowest environmental costs—so-called "green quarries." However, in discussing that matter with the industry, I have always made it clear that developing such a scheme would not be straightforward. It certainly cannot be put in place before the implementation of the levy next year. There are a number of difficulties to be overcome. There will be practical difficulties in relation to assessing compliance, defining environmental performance, the treatment of imports, EU state aid rules and UK competition policy.

We will continue to explore how we can overcome those difficulties, but it will take some time. In any case, the actual terms of a legislative clause cannot be determined at this stage. I am not quite sure what a "scheme of rebates" linked to "environmental protection measures" means. It was not spelled out in the hon. Gentleman's speech, but something along those lines might be one way to do it. There may be other ways, too. For example, for it to be effective, we would need to ensure that any reduced rate scheme benefited quarries with the lowest actual environmental costs. It may be that those are linked directly to location: a quarry that is well managed, but located in a densely populated area or an area of outstanding natural beauty may still have a greater impact on the environment than one that creates a lot of dust and noise, but is located in a remote, sparsely populated area. Those are all issues of which we need to take account.

The amendment could not be implemented as it stands. It would require at the very least a significant delay in the implementation of the levy. We have had a lengthy period of preparation for the levy and I would not support a delay at this stage. I therefore hope that hon. Members will not support the amendment.

A number of hon. Members have queried the benefits of the aggregates levy. I disagree with them. There are clear environmental benefits from the introduction of the levy. I am glad that others support that view. For example, last month, the Wildlife and Countryside Link wrote to me as the liaison body for a coalition of organisations and with the support of the Council for the National Parks and the Council for the Protection of Rural England. It expressed its strong support for the Government's proposed aggregates levy: The environmental damage which the Aggregates Levy is designed to address is occurring now. WCL therefore urges the Government to introduce the Aggregates Levy as soon as possible". I agree.

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

The hon. Member for High Peak (Mr. Levitt) made a convincing speech, used all the right arguments and then came out with completely the wrong conclusion. The Minister used neither the right arguments nor reached the right conclusions. He totally failed to convince and I must ask the Committee's opinion on the amendment.

Question put, That the amendment be made:—

The Committee divided: Ayes 149, Noes 268.

Division No. 186][6.15 pm
AYES
Ainsworth, Peter (E Surrey)Brooke, Rt Hon Peter
Amess, DavidBruce, Ian (S Dorset)
Ancram, Rt Hon MichaelBurnet[...], John
Arbuthnot, Rt Hon JamesBurns, Simon
Atkinson, Peter (Hexham)Burstow, Paul
Baldry, TonyCampbe11, Rt Hon Menzies (NE Fife)
Beith, Rt Hon A J
Bell, Martin (Tatton)Clappison, James
Bercow, JohnClarke, Rt Hon Kenneth (Rushcliffe)
Beresford, Sir Paul
Blunt, CrispinClifton—Brown, Geoffrey
Boswell, TimCormack, Sir Patrick
Bottomley, Peter (Worthing W)Cotter, Brian
Bottomley, Rt Hon Mrs VirginiaCurry, Rt Hon David
Brady, GrahamDavey, Edward (Kingston)
Brake, TomDavies, Quentin (Grantham)
Brand, Dr PeterDavis, Rt Hon David (Haltemprice)
Brazier, JulianDay, Stephen
Breed, ColinDunca[...], Alan
Evans, NigelMichie, Mrs Ray (Argyll & Bute)
Faber, DavidMorgan, Alasdair (Galloway)
Fallon, MichaelNorman, Archie
Fearn, RonnieOaten, Mark
Flight, HowardO'Brien, Stephen (Eddisbury)
Foster, Don (Bath)Öpik, Lembit
Fraser, ChristopherOttaway, Richard
Garnier, EdwardPaice, James
Gibb, NickPaterson, Owen
Gill, ChristopherPickles, Eric
Gillan, Mrs CherylPortillo, Rt Hon Michael
Green, DamianPrior, David
Greenway, JohnRandall, John
Grieve, DominicRedwood, Rt Hon John
Gummer, Rt Hon JohnRendel, David
Hamilton, Rt Hon Sir ArchieRobathan, Andrew
Hammond, PhilipRobertson, Laurence (Tewk'b'ry)
Harvey, NickRoe, Mrs Marion (Broxbourne)
Hawkins, NickRoss, William (E Lond'y)
Hayes, JohnRuffley, David
Heald, OliverSt Aubyn, Nick
Heath, David (Somerton & Frome)Salmond, Alex
Heathcoat—Amory, Rt Hon DavidSanders, Adrian
Horam, JohnSayeed, Jonathan
Howard, Rt Hon MichaelShepherd, Richard
Hughes, Simon (Southwark N)Simpson, Keith (Mid—Norfolk)
Hunter, AndrewSoames, Nicholas
Jack, Rt Hon MichaelSpicer, Sir Michael
Jenkin, BernardStanley, Rt Hon Sir John
Johnson Smith, Rt Hon Sir GeoffreySteen, Anthony
Streeter, Gary
Keetch, PaulSwayne, Desmond
Key, RobertSyms, Robert
King, Rt Hon Tom (Bridgwater)Tapsell, Sir Peter
Kirkbride, Miss JulieTaylor, Ian (Esher & Walton)
Kirkwood, ArchyTaylor, John M (Solihull)
Laing, Mrs EleanorTaylor, Matthew (Truro)
Lait, Mrs JacquiTaylor, Sir Teddy
Lansley, AndrewThomas, Simon (Ceredigion)
Leigh, EdwardTonge, Dr Jenny
Letwin, OliverTredinnick, David
Lewis, Dr Julian (New Forest E)Trend, Michael
Lidington, DavidTyler, Paul
Lilley, Rt Hon PeterTyrie, Andrew
Lloyd, Rt Hon Sir Peter (Fareham)Viggers, Peter
Llwyd, ElfynWaterson, Nigel
Luff, PeterWebb, Steve
Lyell, Rt Hon Sir NicholasWells, Bowen
McCrea, Dr WilliamWhitney, Sir Raymond
MacGregor, Rt Hon JohnWhittingdale, John
McIntosh, Miss AnneWigley, Rt Hon Dafydd
MacKay, Rt Hon AndrewWilletts, David
Maclean, Rt Hon DavidWillis, Phil
McLoughlin, PatrickYeo, Tim
Malins, HumfreyYoung, Rt Hon Sir George
Maples, John
Mates, MichaelTellers for the Ayes:
Mawhinney, Rt Hon Sir BrianSir Robert Smith and
May, Mrs TheresaMr. Bob Russell.
NOES
Ainger, NickBenn, Hilary (Leeds C)
Ainsworth, Robert (Cov'try NE)Benn, Rt Hon Tony (Chesterfield)
Allen, GrahamBennett, Andrew F
Anderson, Rt Hon Donald (Swansea E)Benton, Joe
Bermingham, Gerald
Armstrong, Rt Hon Ms HilaryBest, Harold
Ashton, JoeBetts, Clive
Atkins, CharlotteBlackman, Liz
Austin, JohnBlears, Ms Hazel
Bailey, AdrianBlizzard Bob
Barnes, HarryBoateng, Rt Hon Paul
Barron, KevinBorrow, David
Battle, JohnBradley, Rt Hon Keith (Withington)
Bayley, Hugh
Begg, Miss AnneBradshaw, Ben
Brinton, Mrs HelenHain, Peter
Brown, Russell (Dumfries)Hanson, David
Browne, DesmondHealey, John
Buck, Ms KarenHendrick, Mark
Burden, RichardHepbum, Stephen
Butler, Mrs ChristineHeppell, John
Campbell, Alan (Tynemouth)Hewitt, Ms Patricia
Campbell, Ronnie (Blyth V)Hill, Keith
Campbell—Savours, DaleHinchliffe, David
Cann, JamieHodge, Ms Margaret
Caplin, IvorHoon, Rt Hon Geoffrey
Casale, RogerHope, Phil
Caton, MartinHopkins, Kelvin
Chapman, Ben (Wirral S)Howarth, Rt Hon Alan (Newport E)
Chaytor, DavidHowells, Dr Kim
Clapham, MichaelHughes, Ms Beverley (Stretford)
Clark, Rt Hon Dr David (S Shields)Hughes, Kevin (Doncaster N)
Clarke, Charles (Norwich S)Humble, Mrs Joan
Clarke, Eric (Midlothian)Hurst, Alan
Clarke, Rt Hon Tom (Coatbridge)Hutton, John
Clelland, DavidIddon, Dr Brian
Clwyd, AnnIllsley, Eric
Coffey, Ms AnnJackson, Ms Glenda (Hampstead)
Coleman, lainJackson, Helen (Hillsborough)
Colman, TonyJamieson, David
Connarty, MichaelJenkins, Brian
Cook, Frank (Stockton N)Johnson, Alan (Hull W & Hessle)
Cooper, YvetteJohnson, Miss Melanie (Welwyn Hatfield)
Corbett, Robin
Corbyn, JeremyJones, Rt Hon Barry (Alyn)
Corston, JeanJones, Helen (Warrington N)
Crausby, DavidJones, Jon Owen (Cardiff C)
Cryer, John (Homchurch)Jones, Martyn (Clwyd S)
Cummings, JohnJowell, Rt Hon Ms Tessa
Dalyell, TamKeen, Alan (Feltham & Heston)
Darvill, KeithKeen, Ann (Brentford & Isleworth)
Davey, Valerie (Bristol W)Kelly, Ms Ruth
Davies, Rt Hon Denzil (Llanelli)Kennedy, Jane (Wavertree)
Davies, Geraint (Croydon C)Khabra, Piara S
Dean, Mrs JanetKilfoyle, Peter
Denham, Rt Hon JohnKing, Andy (Rugby & Kenilworth)
Dismore, AndrewLawrence, Mrs Jackie
Dobbin, JimLepper, David
Dobson, Rt Hon FrankLeslie, Christopher
Donohoe, Brian HLevitt, Tom
Doran, FrankLewis, Ivan (Bury S)
Dowd, JimLinton, Martin
Drew, DavidLloyd, Tony (Manchester C)
Eagle, Angela (Wallasey)Lock, David
Eagle, Maria (L'pool Garston)McCabe, Steve
Edwards, HuwMcCartney, Rt Hon Ian (Makerfield)
Efford, Clive
Ellman, Mrs LouiseMcDonnell, John
Ennis, JeffMcFall, John
Field, Rt Hon FrankMcGuire, Mrs Anne
Fisher, MarkMsIsaac, Shona
Fitzpatrick, JimMcKenna, Mrs Rosemary
Flint, CarolineMackinlay, Andrew
Foster, Rt Hon DerekMcNulty, Tony
Foster, Michael Jabez (Hastings)MacShane, Denis
Foster, Michael J (Worcester)Mactaggart, Fiona
Gapes, MikeMcWalter, Tony
Gardiner, BarryMcWilliam, John
George, Rt Hon Bruce (Walsall S)Mahon, Mrs Alice
Gerrard, NeilMandelson, Rt Hon Peter
Gibson, Dr IanMarsden, Gordon (Blackpool S)
Gilroy, Mrs LindaMarshall, David (Shettleston)
Godsiff, RogerMarshall, Jim (Leicester S)
Goggins, PaulMarshall—Andrews, Robert
Golding, Mrs LlinMartlew, Eric
Gordon, Mrs EileenMaxton, John
Griffiths, Jane (Reading E)Meacher, Rt Hon Michael
Griffiths, Nigel (Edinburgh S)Michael, Rt Hon Alun
Griffiths, Win (Bridgend)Michie, Bill (Shef'ld Heeley)
Grocott, BruceMilbum, Rt Hon Alan
Grogan, JohnMiller, Andrew
Mitchell, AustinSmith, Rt Hon Andrew (Oxford E)
Moffatt, LauraSmith, Miss Geraldine (Morecambe & Lunesdale)
Moonie, Dr Lewis
Morgan, Ms Julie (Cardiff N)Smith, Llew (Blaenau Gwent)
Morris, Rt Hon Ms Estelle (B'ham Yardley)Soley, Clive
Southworth, Ms Helen
Morris, Rt Hon Sir John (Aberavon)Squire, Ms Rachel
Starkey, Dr Phyllis
Mountford, KaliSteinberg, Gerry
Mowlam, Rt Hon MarjorieStevenson, George
Mudie, GeorgeStewart, David (Invemess E)
Murphy, Denis (Wansbeck)Stewart, Ian (Eccles)
Naysmith, Dr DougStinchcombe, Paul
O'Brien, Bill (Normanton)Stoate, Dr Howard
O'Brien, Mike (N Warks)Strang, Rt Hon Dr Gavin
Olner, BillStraw, Rt Hon Jack
Organ, Mrs DianaStuart, Ms Gisela
Pearson, IanTaylor, Rt Hon Mrs Ann (Dewsbury)
Pendry, Rt Hon Tom
Pike, Peter LTaylor, David (NW Leics)
Pond, ChrisTemple—Morris, Peter
Pope, GregThomas, Gareth R (Harrow W)
Pound, StephenTimms, Stephen
Prentice, Ms Bridget (Lewisham E)Tipping, Paddy
Prentice, Gordon (Pendle)Todd, Mark
Prescott, Rt Hon JohnTrickett, Jon
Primarolo, DawnTruswell, Paul
Prosser, GwynTurner, Dennis (Wolverh'ton SE)
Quinn, LawrieTurner, Dr Desmond (Kemptown)
Radice, Rt Hon GilesTurner, Neil (Wigan)
Raynsford, Rt Hon NickTwigg, Derek (Halton)
Reed, Andrew (Loughborough)Twigg, Stephen (Enfield)
Robertson, John (Glasgow Anniesland)Tynan, Bill
Walley, Ms Joan
Roche, Mrs BarbaraWareing, Robert N
Rogers, AllanWatts, David
Rooker, Rt Hon JeffWhite, Brian
Rooney, TerryWicks, Malcolm
Ross, Ernie (Dundee W)Williams, Rt Hon Alan (Swansea W)
Rowlands, Ted
Roy, FrankWills, Michael
Ruddock, JoanWinterton, Ms Rosie (Doncaster C)
Russell, Ms Christine (Chester)Woodward, Shaun
Ryan, Ms JoanWoolas, Phil
Salter, MartinWorthington, Tony
Savidge, MalcolmWright, Anthony D (Gt Yarmouth)
Sedgemore, Brian
Sheldon, Rt Hon RobertTellers for the Noes:
Simpson, Alan (Nottingham S)Mr. Mike Hall and
Skinner, DennisMr. Gerry Sutcliffe.

Question accordingly negatived.

Photo of Richard Ottaway Richard Ottaway Shadow Spokesperson (Treasury)

I beg to move amendment No. 9, in page 12, line 31, at end insert— '(4A) The first 250,000 tonnes of taxable output per taxable person in each accounting period shall be exempt from the levy; and for the purposes of this subsection, where a taxable person carries on business in partnership, that partnership shall be the taxable person for the purposes of the exemption.'. The purpose of the amendment is to help the small quarry operator—the type of operator described by the hon. Member for High Peak (Mr. Levitt) as a "cowboy". I do not accept that description, because there are many good small operators and that was an unwarranted slur on them.

Photo of Tom Levitt Tom Levitt Labour, High Peak

Will the hon. Gentleman give way?

Photo of Richard Ottaway Richard Ottaway Shadow Spokesperson (Treasury)

I am sorry, but the timetable motion is so tight that I intend to be very brief.

Five large companies control 80 per cent. of the aggregates market and 90 per cent. of the market in ready-mixed asphalt. The existence of the small quarry operators maintains competition, leads to environmental improvements and provides jobs in remote rural areas, where the small operators are located. The amendment provides that the first 250,000 tonnes of aggregate would be exempt from the levy. The principle is the same as applies in personal taxation, with tax-free allowances, and in the small business rate of corporation tax, which is lower at the bottom end of the scale.

The aggregates levy will make it harder for the smaller operators to compete. They tend to be located in the remoter rural areas, and the major operators are mainly in the south of England, where aggregates earn £12.50 a tonne. In remote areas, such as Scotland, the value of aggregates is £2.50 a tonne. The flat rate levy wi11 therefore be 12 per cent. in the south-east but more than 50 per cent. in remote rural areas. The hon. Member for Somerton and Frome (Mr. Heath) mentioned secondary aggregates; they can be worth as little as £1 a tonne, which would make the aggregates levy a huge 160 per cent.

The second factor that will make life more difficult for the small operators is that the majors also tend to control the downstream operations in ready-mix and in asphalt. The majors will load the levy on to those products, but that option will not be available to the smaller operators. The third factor is the bureaucracy that the levy will involve. Some of the product mined will be used as aggregate for construction, but some will be used as an industrial mineral and will not attract the levy. That will lead to complex bookkeeping arrangements. In-house products, such as recycled or reclaimed products, can be blended with mined product, which will also lead to complications in bookkeeping. Complex computer systems will be needed, and the small operators doubt whether they can afford the additional cost of the software.

The result will be that the small operators will go out of business. Jobs will be lost in rural areas and the big companies will move in and finish off the smaller guys, as they have been trying to do for some time. The environmental consequences will be serious, because customers will have to travel further to get their aggregate and it will have to be delivered further afield, with consequences for transport systems. Fewer, larger quarries will result, which will be both environmentally and commercially detrimental.

Most small operators tend to be family-run organisations with limited staff and resources. The burden of regulation is tough enough for them, and the levy will be the last straw. The consequence will be job losses and environmental damage.

Photo of Tom Levitt Tom Levitt Labour, High Peak

I wish to put it on record that I did not say that all small quarry operators were bad. However, bigger operators, which can invest in environmental measures, tend—in my experience of the quarries in my constituency—to have a better record. Some of the smaller operators are more likely to flout planning regulations and to take the least care of the environment. They also put health and safety regulations to one side and refuse trade union recognition Therefore, the special pleading on behalf of smaller operators is not justified. I would be happy to be proved wrong, and I will happily visit all the quarries in the constituency of the hon. Member for Croydon, South (Mr. Ottaway) if he will visit all the quarries in High Peak—but I have no hesitation in opposing the amendment.

Photo of Mr Christopher Gill Mr Christopher Gill Conservative, Ludlow

I wish to put on record my opposition to the tax, and to express my great disappointment that the voluntary scheme proposed by the Quarry Products Association has been ignored in favour of this huge cost imposition. It will be a tax on jobs, which are very valuable in rural areas. Of course, the economy in those areas is already suffering badly as a result of the Government's mishandling of the problems caused by foot and mouth and the downturn in the agriculture sector.

The tax will impose an additional cost burden on every construction project, from roads, railways and port facilities to housing developments, property repairs and home extensions. There are several quarries in Ludlow, some run by small private companies and some by large plcs. They quarry sand, gravel, limestone and granite. In particular, stone from Clee hill is sent to south Wales, where it is converted into rockwool, an insulating material. I hope that the Government will take some notice of my concerns about the effect on the valuable and irreplaceable jobs in my constituency, which will be prejudiced by this unnecessary and unjustifiable tax.

Photo of Stephen Timms Stephen Timms The Financial Secretary to the Treasury

I hope that the House will not accept the amendment. The package is not a tax on jobs. Indeed, I made the point earlier that it is the opposite, because the bulk of the proceeds from the levy will go on a reduction in employer national insurance contributions. The hon. Member for Ludlow (Mr. Gill) mentioned the new deal proposal by the Quarry Products Association, but one of the reasons why that was not a viable package in the end was the opposition to it from the smaller quarries, which argued that The QPA new deal has been tabled as an industry-funded alternative to taxation, but heavily discriminates against the smaller independent operator. It is precisely the smaller quarries that felt that the package should not go ahead.

As my hon. Friend the Member for High Peak (Mr. Levitt) rightly said, the levy is being introduced to deal with the significant environmental costs associated with quarries, and applies to all aggregates extracted from any quarry, including the first 250,000 tonnes in an accounting period to which the amendment refers. Typically, there will be four accounting periods in a year, so we are talking about quarries producing up to 1 million tonnes a year. Not only small quarries but some of significant size would benefit, so the amendment is not targeted quite as the hon. Member for Croydon, South (Mr. Ottaway) intended.

A de minimis limit is in any case not usual with a specific, one-stage, non-deductible tax. Another serious difficulty about the amendment is that such an exemption would be seriously anti-competitive for the UK as a whole, because under EU law all imports would have to be treated as below the de minimis level and therefore exempt from the levy, which would obviously have a very detrimental impact on UK quarries that paid the levy.

I hope that the hon. Gentleman will withdraw the amendment.

Photo of Richard Ottaway Richard Ottaway Shadow Spokesperson (Treasury)

I am grateful for that response, and beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Photo of Oliver Letwin Oliver Letwin Shadow Chief Secretary to the Treasury

In a rational world, we would now be beginning a significant debate on the clause, which is the single most important clause in the Bill—not a great dignity in this case, but true. However, because of the way in which the Government have timetabled the proceedings, that option is no longer available. Moreover, we will never get to debate the serious amendments tabled to clauses 17 and 18, which are the second and third most important clauses in the Bill. I do not think that there is any previous example of a Government so determined to ram through a half-baked Bill that they fail to allow any time whatever to debate its most important parts.

To do Ministers justice, I suspect that this is a comedy of errors rather than an attempt to undermine parliamentary sovereignty. I fear that that is also true of the whole of the clause and the tax that it introduces. There are some half-good ideas sitting at the back of somebody's mind, but they have not been brought to the forefront of the lobes of the Ministers and officials involved. Still less have they been translated into a coherent regime. That is because, although it has taken three years in the gestation, the whole scheme bears all the appearance of having been concocted at the last moment without the necessary consultation.

This is above all a tax that demanded a Special Standing Committee procedure, which would have enabled the Financial Secretary to discuss properly with the industry how it could be implemented so as to achieve the Government's aims for it. Nothing of that kind has been done, as became very clear in the response to the debate on amendment No. 4. The tax was produced by the wrong procedure, and is therefore the wrong tax.

Photo of Edward Davey Edward Davey Shadow Minister (Olympics and London), Shadow Spokesperson (Treasury), Liberal Democrat Spokesperson (Treasury), Liberal Democrat Spokesperson (Olympics and London)

The hon. Gentleman is making an important point. Does he agree that it would have been possible for the Government to introduce an aggregates tax with a better rebate scheme, and that it would still be possible for them, having heard the debate, to design a tax that might gain wider support?

Photo of Oliver Letwin Oliver Letwin Shadow Chief Secretary to the Treasury 6:45 pm, 23rd April 2001

Yes. We know that it would have been possible because the climate change levy, which my colleagues and I inveighed against at length, was none the less much better designed than this tax in just that respect: at least it was so constructed that it aimed to allow the arbitrary powers of the Department of the Environment, Transport and the Regions to be brought to bear on that part of industry that the Government wanted, as they put it, to reform its ways. I objected to that tax, and I object to this one. I object to that manner of proceeding, but at least it would have been a rational and coherent manner of proceeding—objectionable but rational. This tax is objectionable and irrational, because it has been wrongly introduced, just as the hon. Gentleman said.

I want to dwell on a feature of clause 17 that we will not have time to debate. The tax is amazingly complicated to enforce. The hon. Member for Somerton and Frome (Mr. Heath) referred to the problem with scalpings, and there are many similar problems, as exposed in the amendments tabled to clause 17. It is extraordinarily difficult to disentangle one item that is being extracted from a quarry from another.

It is not only a matter of Ministers having moved too fast. Even were they to have moved at a reasonable pace, they probably would not have been able to design an easily enforced version of the tax. One of the principles of taxation should be that it is so clear that it is easy to enforce. Many theoreticians thought that the selective employment tax was wonderful. Alas, it had disastrous consequences, because it was almost impossible to enforce in any rational way. This bears all the hallmarks of being another such tax.

At best, the tax will be highly intrusive, because the machinations required for the inspectors to enforce it properly will be horrible. Most businesses already resent the appearance of Her Majesty's Customs and Excise at their premises, partly for good reasons and partly for bad. One good reason is that they find it a distraction from their ordinary business. The distraction involved in a normal VAT inspection will be as nothing to the distraction involved in the heroic efforts of inspectors from Her Majesty's Customs and Excise to turn themselves into geological experts who can disentangle one extracted item from another, when none of the quarry operators involved find it easy to do so.

Far worse, this comedy of errors is in fact a tragicomedy, because the Government, for some unfathomable reason, have ignored—they cannot have forgotten it, because it has been pointed out to them so frequently—the fact that, as the hon. Member for East Londonderry (Mr. Ross) said, the way in which the tax has been designed, although an improvement on the climate change levy in the respect that it allows for credits against exports and taxes imports, means that it does not tax the form of import that has been incorporated in pre-cast concrete, for example. That will prove a disastrous blow for the aggregates industry in Northern Ireland and a significant blow for parts of the industry in southern England that will face severe and unsustainable price competition from Normandy and elsewhere in northern France.

I do not know why the Government have chosen needlessly to expose British industry in that way, putting at risk between 4,000 and 10,000 jobs, depending on which estimate one takes, but it is clear to me that it can be no part of a rational economic policy to design a tax with that effect. As the Bill is drafted, it has that effect ineluctably. Had the Government been willing to accept the exemptions proposed in amendment No. 4, some firms at least would have been able to avoid the effect, but as it is none can.

Photo of Stephen Timms Stephen Timms The Financial Secretary to the Treasury

I should like to challenge the hon. Gentleman on his point about concrete blocks. As I understand it, the current proportion of consumption in the United Kingdom of concrete blocks supplied from abroad is 1 per cent. What does the hon. Gentleman think that it will be once the levy has been introduced? His point is entirely vacuous.

Photo of Oliver Letwin Oliver Letwin Shadow Chief Secretary to the Treasury

I am surprised, because although I often disagree with the Financial Secretary, he almost always makes a powerful argument. As I understand the matter, having talked, as he must have done, to the Quarry Products Association and the British Aggregates Association—before I go any further, I should declare an interest, because I may have one that I am not aware of—there will be the ability to import a series of substances made up from aggregates from south of the border in Northern Ireland, and concrete blocks from Normandy and northern France by ship, to substitute for what are currently used as building materials because of a huge inbuilt price advantage. If I remember correctly, the equivalent tax in France is about 5p per tonne. If there is a price advantage of £1.55 per tonne we can expect to see a change in the structure of the industry and of demand in the UK. That point must have been made to the Financial Secretary.

Photo of Stephen Timms Stephen Timms The Financial Secretary to the Treasury

The hon. Gentleman will recognise that significant transport costs must be set off against any tax differential that might exist. That is why I think that his suggestion that the introduction of the levy will result in large job losses is entirely unfounded.

Photo of Oliver Letwin Oliver Letwin Shadow Chief Secretary to the Treasury

Industry experts have gone through the cost structure of transport with us, which was alluded to earlier, and have demonstrated to our satisfaction that where demand for these products is appropriately located, as in Northern Ireland and on the south coast, and where there is a readily available means of transport, whether it be by rail or road or ship, the transport costs are not prohibitive and there will remain a significant cost advantage. If the Financial Secretary has figures showing the contrary, surely he would have been able to persuade the industry of that fact by now. There is no reason for the industry to make this argument if it is not true, because the Financial Secretary has already taken the trouble to exempt exports and imports otherwise. Surely he could now do what the industry asks in relation to fabrication.

Photo of Stephen Timms Stephen Timms The Financial Secretary to the Treasury

I will be meeting industry representatives next week and will be discussing that with them. There is an issue to do with Northern Ireland that we will come to later. However, I do not think that the hon. Gentleman's point about supplies from France to southern England is a serious concern.

Photo of Oliver Letwin Oliver Letwin Shadow Chief Secretary to the Treasury

I very much hope that the Financial Secretary is right and that he will be able to persuade the industry of that, although I am not persuaded. We will indeed come back to the question of Northern Ireland.

I turn now to an element of mythology, which the Financial Secretary has been assiduous in peddling, if I may use a derogatory term. He and his colleagues exposed the myth in the Budget. The hon. Gentleman maintains, as he did with the climate change levy—and I do not doubt his honesty in maintaining it, but it is a myth—that it is a fiscally neutral measure. Of course, he is right—on day one, it is a fiscally neutral measure. The landfill tax was also fiscally neutral when it was introduced. This Budget increased the landfill tax. Did it increase the rebate of national insurance contributions likewise? No.

Will we have an assurance from Ministers this evening that at no time during the lifetime of this Government, or of any Government for whom they are responsible, will there be an increase in this tax without a commensurate increase in the rebate on national insurance contributions? If we get that commitment, I will withdraw my assertion. However, I doubt that we will. The Government have shown through their actions on the landfill tax that they have no inhibitions about increasing such taxes and removing the day one fiscal neutrality.

If I made you the grand offer, Dr. Clark, to engage in a fiscally neutral transaction with you in which you gave me a pint of beer and I gave you an equivalent amount of whisky, but you promised me that you would give me as much beer in all the subsequent years of your life as I demanded, without my making an equivalent promise to you in terms of whisky, you would be a mug. That is what the British public will be if they are led to believe that this is a fiscally neutral measure. It is nothing of the kind. Naturally, you would not engage in such a transaction, Dr. Clark. There is no reason for anyone to believe that this is a fiscally neutral measure; it is a platform for engaging in tax raising.

The Government have gone to considerable public expense—I cannot recall the exact figure, but I suspect that it is about £100,000—to produce a magnificent report. The Financial Secretary referred to it—indeed, he waved it around a moment ago. This magnificent report purports to show that the figure of £1.60 a tonne—or, rather, a slightly higher figure, once we allow for some fancy manoeuvres—is justified as the tax in this case because of the optimality rule. That rule states that one must always tax at exactly the cost of the externalities—the cost of the damage done.

This is a really splendid thesis, and it is absolutely true. However, it relies on accumulating a group of human beings who are geniuses and are sufficiently talented to find out the cost of the damage. Alas, in the length and breadth of the United Kingdom, no such geniuses were to be found by Her Majesty's Government. Instead, they employed some ordinary human beings in the form of very intelligent, highly qualified consultants. You may not believe this, Dr. Clark, because it sounds as though I am making it up, but these consultants asked a large number of people who lived somewhere near quarries in various places how much they would pay, if they were given the option, to avoid having various things near them, including quarries and the trucks associated with them.

This is a marvellous idea. We can just imagine these earnest seekers after truth wandering around the highways and byways of the areas of outstanding natural beauty where quarries are to be found and asking Mrs. Jones and Mrs. Smith exactly, to the nearest 5p or so, how much they would be prepared to pay to avoid having a quarry 300 yd from their home. Mrs. Jones and Mrs. Smith gave them the answers; they added everything up and produced, for about £100,000, a huge report for the Financial Secretary and the Department of the Environment, Transport and the Regions, which has been taken very seriously. I do not know at which point "Yes, Minister" takes over from serious government, but it took over long before the report was produced. The fact is that optimality is as much a myth as fiscal neutrality.

We come now to the ghastly fact that this tax will be enforced by Her Majesty's Customs and Excise, notwithstanding its complexity and irrationality, and notwithstanding the fact that it will not achieve any serious environmental effect because there is no rebate scheme, which would have been necessary for it to have such an effect. There is already a serious problem about the arbitrary powers that have been allocated to Her Majesty's Customs and Excise. We spoke about that at tedious length during the previous Finance Bill. The Conservative party has put forward a 10-point plan, which is just the beginning—the tip of the iceberg—of an attempt to constrain those arbitrary powers. Yet clause 16 provides a huge extension of the arbitrary powers of Her Majesty's Customs and Excise.

I shall give just one example, which, again, we will not be allowed to debate. If someone appeals to the commissioners—and the system is designed so that one can appeal without having to go to court and needing lawyers—and they do not give an answer after a certain period, what does this magnificent Bill provide? One might think that the appeal would be won by the appellant if the commissioners did not reply. Not at all. Under the Bill, if the commissioners do not answer, the appeal is refused.

Photo of Oliver Letwin Oliver Letwin Shadow Chief Secretary to the Treasury

I am sorry, but I shall not give way on this occasion, as I have one minute left. However, I would be happy to allow the Minister to reply at length if his Whip will rearrange matters so that we can have a serious amount of time in which to debate this.

In my final half minute, I want to say simply that this tax is irrational and is being introduced in the wrong way. It has the wrong powers of enforcement and it will cost jobs. Even more than all that, though, it is an empty box. Almost everything that will bring it into effect will come in a series of regulations that the House will never seriously debate. People fought and died to establish as the principal feature of our parliamentary democracy the sovereignty of Parliament over taxation. To remit the basis of our taxation to regulation is a precedent that Members on the Government Benches will live to regret as much as we do.

It being Seven o'clock, THE TEMPORARY CHAIRMAN, pursuant to Orders [7 November and 9 April], put forthwith the Question already proposed from the Chair.

The Committee divided: Ayes 286, Noes 126.

Division No. 187][7 pm
AYES
Adams, Mrs Irene (Paisley N)Best, Harold
Ainger, NickBetts, Clive
Ainsworth, Robert (Cov'try NE)Blackman, Liz
Allan, RichardBlears, Ms Hazel
Allen, GrahamBlizzard, Bob
Anderson, Rt Hon Donald (Swansea E)Boateng, Rt Hon Paul
Borrow, David
Ashdown, Rt Hon PaddyBradley, Rt Hon Keith (Withington)
Ashton, Joe
Atkins, CharlotteBradshaw, Ben
Austin, JohnBrake, Tom
Bailey, AdrianBrinton, Mrs Helen
Baker, NormanBrown, Russell (Dumfries)
Banks, TonyBrowne, Desmond
Barnes, HarryBuck, Ms Karen
Barron, KevinBurden, Richard
Battle, JohnBurstow, Paul
Bayley, HughButler, Mrs Christine
Begg, Miss AnneCampbell, Alan (Tynemouth)
Benn, Hilary (Leeds C)Campbell, Rt Hon Menzies (NE Fife)
Benn, Rt Hon Tony (Chesterfield)
Bennett, Andrew FCampbell, Ronnie (Blyth V)
Benton, JoeCampbell—Savours, Dale
Bermingham, GeraldCaplin, Ivor
Casale, RogerHinchliffe, David
Caton, MartinHodge, Ms Margaret
Chapman, Ben (Wirral S)Hoon, Rt Hon Geoffrey
Chaytor, DavidHope, Phil
Chidgey, DavidHopkins, Kelvin
Clapham, MichaelHowarth, Rt Hon Alan (Newport E)
Clark, Rt Hon Dr David (S Shields)Howells, Dr Kim
Clarke, Eric (Midlothian)Hughes, Ms Beverley (Stretford)
Clarke, Rt Hon Tom (Coatbridge)Hughes, Kevin (Doncaster N)
Clelland, DavidHughes, Simon (Southwark N)
Clwyd, AnnHumble, Mrs Joan
Coffey, Ms AnnHurst, Alan
Coleman, IainHutton, John
Colman, TonyIddon, Dr Brian
Connarty, MichaelIllsley, Eric
Cook, Frank (Stockton N)Jackson, Ms Glenda (Hampstead)
Cooper, YvetteJackson, Helen (Hillsborough)
Corbett, RobinJamieson, David
Corbyn, JeremyJenkins, Brian
Corston, JeanJohnson, Alan (Hull W & Hessle)
Cousins, JimJohnson, Miss Melanie (Welwyn Hatfield)
Crausby, David
Cryer, John (Hornchurch)Jones, Rt Hon Barry (Alyn)
Cummings, JohnJones, Helen (Warrington N)
Dalyell, TamJones, Jon Owen (Cardiff C)
Darling, Rt Hon AlistairJones, Martyn (Clwyd S)
Darvill, KeithKeen, Alan (Feltham & Heston)
Davey, Edward (Kingston)Keen, Ann (Brentford & Isleworth)
Davey, Valerie (Bristol W)Kelly, Ms Ruth
Davies, Rt Hon Denzil (Llanelli)Kennedy, Jane (Wavertree)
Davies, Geraint (Croydon C)Khabra, Piara S
Dean, Mrs JanetKilfoyle, Peter
Denham, Rt Hon JohnKing, Andy (Rugby & Kenilworth)
Dismore, AndrewLammy, David
Dobbin, JimLawrence, Mrs Jackie
Dobson, Rt Hon FrankLepper, David
Donohoe, Brian HLeslie, Christopher
Doran, FrankLevitt, Tom
Dowd, JimLewis, Ivan (Bury S)
Drew, DavidLloyd, Tony (Manchester C)
Eagle, Angela (Wallasey)Lock, David
Eagle, Maria (L'pool Garston)Love, Andrew
Edwards, HuwMcCabe, Steve
Efford, CliveMcCartney, Rt Hon Ian (Makerfield)
Ellman, Mrs Louise
Ennis, JeffMcDonnell, John
Fearn, RonnieMcFall, John
Field, Rt Hon FrankMcGuire, Mrs Anne
Fisher, MarkMclsaac, Shona
Fitzpatrick, JimMcKenna, Mrs Rosemary
Flint, CarolineMackinlay, Andrew
Foster, Rt Hon DerekMcNulty, Tony
Foster, Don (Bath)MacShane, Denis
Foster, Michael Jabez (Hastings)Mactaggart, Fiona
Foster, Michael J (Worcester)McWalter, Tony
Gapes, MikeMcWilliam, John
George, Rt Hon Bruce (Walsall S)Mahon, Mrs Alice
Gerrard, NeilMarsden, Gordon (Blackpool S)
Gibson, Dr IanMarshall, David (Shettleston)
Gilroy, Mrs LindaMarshall, Jim (Leicester S)
Godsiff, RogerMarshall—Andrews, Robert
Goggins, PaulMartlew, Eric
Golding, Mrs LlinMaxton, John
Gordon, Mrs EileenMichael, Rt Hon Alun
Griffiths, Jane (Reading E)Michie, Bill (Shef'ld Heeley)
Griffiths, Nigel (Edinburgh S)Milburn, Rt Hon Alan
Griffiths, Win (Bridgend)Miller, Andrew
Grocott, BruceMitchell, Austin
Grogan, JohnMoffatt, Laura
Hain, PeterMoonie, Dr Lewis
Hanson, DavidMoore, Michael
Healey, JohnMorgan, Ms Julie (Cardiff N)
Hendrick, MarkMorris, Rt Hon Ms Estelle (B'ham Yardley)
Hepburn, Stephen
Heppell, JohnMorris, Rt Hon Sir John (Aberavon)
Hill, Keith
Mountford, KaliSoley, Clive
Mowlam, Rt Hon MarjorieSouthworth, Ms Helen
Mudie, GeorgeSpellar, John
Murphy, Denis (Wansbeck)Squire, Ms Rachel
Naysmith, Dr DougStarkey, Dr Phyllis
O'Brien, Bill (Normanton)Steinberg, Gerry
Olner, BillStevenson, George
Organ, Mrs DianaStewart, David (Inverness E)
Pearson, IanStewart, Ian (Eccles)
Pendry, Rt Hon TomStoate, Dr Howard
Pike, Peter LStrang, Rt Hon Dr Gavin
Pond, ChrisStuart, Ms Gisela
Pope, GregTaylor, Rt Hon Mrs Ann (Dewsbury)
Pound, Stephen
Powell, Sir RaymondTaylor, David (NW Leics)
Prentice, Ms Bridget (Lewisham E)Taylor, Matthew (Truro)
Prentice, Gordon (Pendle)TemPle—Morris, Peter
Primarolo, DawnThomas, Gareth R (Harrow W)
Prosser, DawnTimms, Stephen
Quinn, LawrieTipping, Paddy
Radice, Rt Hon GilesTodd, Mark
Raynsford, Rt Hon NickTonge, Dr Jenny
Trickett, Jon
Reed, Andrew (Loughborough)Truswell, Paul
Rendel, DavidTurner, Dennis (Wolverh'ton SE)
Robertson, John (Glasgow Anniesland)Turner, Dr Desmond (Kemptown)
Robinson, Geoffrey (Cov'try NW)Turner, Neil (Wigan)
Roche, Mrs BarbaraTwigg, Derek (Halton)
Rogers, AllanTwigg, Stephen (Enfield)
Rooker, Rt Hon JeffTynan, Bill
Rooney, TerryWalley, Ms Joan
Ross, Ernie (Dundee W)Wareing, Robert N
Rowlands, TedWatts, David
Roy, FrankWhite, Brian
Ruddock, JoanWicks, Malcolm
Russell, Bob (Colchester)Williams, Rt Hon Alan (Swansea W)
Russell, Ms Christine (Chester)Williams, Alan W (E Carmarthen)
Ryan, Ms JoanWillis, Phil
Salter, MartinWills, Michael
Sanders, AdrianWinnick, David
Savidge, MalcolmWinterton, Ms Rosie (Doncaster C)
Sedgemore, BrianWoodward, Shaun
Shaw, JonathanWoolas, Phil
Sheldon, Rt Hon RobertWorthington, Tony
Simpson, Alan (Nottingham S)Wright, Anthony D (Gt Yarmouth)
Skinner, DennisWyatt, Derek
Smith, Rt Hon Andrew (Oxford E)
Smith, Miss Geraldine (Morecambe & Lunesdale)Tellers for the Ayes:
Mr. Mike Hall and
Smith, Llew (Blaenau Gwent)Mr. Gerry Sutcliffe.
NOES
Ainsworth, Peter (E Surrey)Clifton—Brown, Geoffrey
Amess, DavidCormack, Sir Patrick
Ancram, Rt Hon MichaelCurry, Rt Hon David
Arbuthnot, Rt Hon JamesDavies, Quentin (Grantham)
Baldry, TonyDavis, Rt Hon David (Haltemprice)
Beith, Rt Hon A JDuncan, Alan
Bell, Martin (Tatton)Evans, Nigel
Bercow, JohnFabricant, Michael
Beresford, Sir PaulFraser, Christopher
Blunt, CrispinGarnier, Edward
Boswell, TimGibb, Nick
Bottomley, Peter (Worthing W)Gill, Christopher
Bottomley, Rt Hon Mrs VirginiaGillan, Mrs Cheryl
Brady, GrahamGreen, Damian
Brazier, JulianGreenway, John
Breed, ColinGrieve, Dominic
Brooke, Rt Hon PeterGummer, Rt Hon John
Bruce, Ian (S Dorset)Hamilton, Rt Hon Sir Archie
Burnett, JohnHammond, Philip
Burns, SimonHawkins, Nick
Clappison, JamesHayes, John
Clarke, Rt Hon Kenneth (Rushcliffe)Heald, Oliver
Heath, David (Somerton & Frome)
Horam, JohnRandall, John
Jack, Rt Hon MichaelRedwood, Rt Hon John
Jenkin, BernardRobathan, Andrew
Johnson Smith, Rt Hon Sir GeoffreyRobertson, Laurence (Tewk'b'ry)
Roe, Mrs Marion (Broxbourne)
Key, RobertRoss, William (E Lond'y)
King, Rt Hon Tom (Bridgwater)Ruffley, David
Kirkbride, Miss JulieSt Aubyn, Nick
Kirkwood, ArchySalmond, Alex
Laing, Mrs EleanorSayeed, Jonathan
Lait, Mrs JacquiShepherd, Richard
Lansley, AndrewSimpson, Keith (Mid—Norfolk)
Leigh, EdwardSmith, Sir Robert (W Ab'd'ns)
Letwin, OliverSoames, Nicholas
Lewis, Dr Julian (New Forest E)Spicer, Sir Michael
Lidington, DavidStanley, Rt Hon Sir John
Lilley, Rt Hon PeterSteen, Anthony
Lloyd, Rt Hon Sir Peter (Fareham)Streeter, Gary
Llwyd, ElfynSwayne, Desmond
Loughton, TimSyms, Robert
Luff, PeterTapsell, Sir Peter
Lyell, Rt Hon Sir NicholasTaylor, Ian (Esher & Walton)
McCrea, Dr WilliamTaylor, John M (Solihull)
MacGregor, Rt Hon JohnTaylor, Sir Teddy
McIntosh, Miss AnneThomas, Simon (Ceredigion)
MacKay, Rt Hon AndrewTredinnick, David
Maclean, Rt Hon DavidTrend, Michael
McLoughlin, PatrickTyler, Paul
Madel, Sir DavidTyrie, Andrew
Malins, HumfreyViggers, Peter
Maples, JohnWaterson, Nigel
Mates, MichaelWells, Bowen
Mawhinney, Rt Hon Sir BrianWhitney, Sir Raymond
May, Mrs TheresaWhittingdale, John
Michie, Mrs Ray (Argyll & Bute)Wigley, Rt Hon Dafydd
Morgan, Alasdair (Galloway)Willetts, David
O'Brien, Stephen (Eddisbury)Winterton, Mrs Ann (Congleton)
Öpik, LembitWinterton, Nicholas (Macclesfield)
Ottaway, RichardYoung, Rt Hon Sir George
Paice, James
Paterson, OwenTellers for the Noes:
Pickles, EricMr. Peter Atkinson and
Prior, DavidMr. Stephen Day.

Question accordingly agreed to.

Clause 16 ordered to stand part of the Bill.

THE TEMPORARY CHAIRMAN then proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at that hour.

Motion made, and Question put, That clauses 17 to 22 stand part of the Bill:—

The Committee divided: Ayes 287, Noes 123.

Division No. 188][7.15 pm
AYES
Adams, Mrs Irene (Paisley N)Begg, Miss Anne
Ainger, NickBenn, Hilary (Leeds C)
Ainsworth, Robert (Cov'try NE)Benn, Rt Hon Tony (Chesterfield)
Allan, RichardBennett, Andrew F
Allen, GrahamBenton, Joe
Armstrong, Rt Hon Ms HilaryBermingham, Gerald
Ashdown, Rt Hon PaddyBest, Harold
Ashton, JoeBetts, Clive
Atkins, CharlotteBlackman, Liz
Austin, JohnBlears, Ms Hazel
Bailey, AdrianBlizzard, Bob
Baker, NormanBoateng, Rt Hon Paul
Banks, TonyBorrow, David
Barnes, HarryBradley, Rt Hon Keith (Withington)
Barron, Kevin
Battle, JohnBradshaw, Ben
Bayley, HughBrake, Tom
Breed, ColinGordon, Mrs Eileen
Brinton, Mrs HelenGriffiths, Jane (Reading E)
Brown, Russell (Dumfries)Griffiths, Nigel (Edinburgh S)
Browne, DesmondGriffiths, Win (Bridgend)
Buck, Ms KarenGrocott, Bruce
Burden, RichardGrogan, John
Burstow, PaulHain, Peter
Butler, Mrs ChristineHanson, David
Campbell, Alan (Tynemouth)Healey, John
Campbell, Rt Hon Menzies (NE Fife)Hendrick, Mark
Hepburn, Stephen
Campbell, Ronnie (Blyth V)Heppell, John
Campbell—Savours, DaleHill, Keith
Caplin, IvorHinchliffe, David
Casale, RogerHodge, Ms Margaret
Caton, MartinHood, Jimmy
Chapman, Ben (Wirral S)Hoon, Rt Hon Geoffrey
Chaytor, DavidHope, Phil
Chidgey, DavidHopkins, Kelvin
Clapham, MichaelHowarth, Rt Hon Alan (Newport E)
Clark, Rt Hon Dr David (S Shields)Hughes, Ms Beverley (Stretford)
Clarke, Eric (Midlothian)Hughes, Kevin (Doncaster N)
Clarke, Rt Hon Tom (Coatbridge)Humble, Mrs Joan
Clelland, DavidHurst, Alan
Clwyd, AnnHutton, John
Coffey, Ms AnnIddon, Dr Brian
Coleman, IainIllsley, Eric
Colman, TonyJackson, Ms Glenda (Hampstead)
Connarty, MichaelJackson, Helen (Hillsborough)
Cook, Frank (Stockton N)Jamieson, David
Cooper, YvetteJenkins, Brian
Corbett, RobinJohnson, Alan (Hull W & Hessle)
Corston, JeanJohnson, Miss Melanie (Welwyn Hatfield)
Cousins, Jim
Crausby, DavidJones, Rt Hon Barry (Alyn)
Cryer, John (Hornchurch)Jones, Helen (Warrington N)
Cummings, JohnJones, Jon Owen (Cardiff C)
Dalyell, TamJones, Martyn (Clwyd S)
Darling, Rt Hon AlistairJowell, Rt Hon Ms Tessa
Darvill, KeithKeen, Alan (Feltham & Heston)
Davey, Edward (Kingston)Keen, Ann (Brentford & Isleworth)
Davey, Valerie (Bristol W)Kelly, Ms Ruth
Davies, Rt Hon Denzil (Llanelli)Kennedy, Jane (Wavertree)
Davies, Geraint (Croydon C)Khabra, Piara S
Dean, Mrs JanetKilfoyle, Peter
Denham, Rt Hon JohnKing, Andy (Rugby & Kenilworth)
Dismore, AndrewKirkwood, Archy
Dobbin, JimLammy, David
Dobson, Rt Hon FrankLawrence, Mrs Jackie
Donohoe, Brian HLepper, David
Doran, FrankLeslie, Christopher
Dowd, JimLevitt, Tom
Drew, DavidLewis, Ivan (Bury S)
Eagle, Angela (Wallasey)Lloyd, Tony (Manchester C)
Eagle, Maria (L'pool Garston)Lock, David
Edwards, HuwLove, Andrew
Efford, CliveMcAvoy, Thomas
Ellman, Mrs LouiseMcCabe, Steve
Ennis, JeffMcCartney, Rt Hon Ian (Makerfield)
Fearn, Ronnie
Field, Rt Hon FrankMcDonnell, John
Fisher, MarkMcFall, John
Fitzpatrick, JimMcGuire, Mrs Anne
Flint, CarolineMcIsaac, Shona
Foster, Rt Hon DerekMcKenna, Mrs Rosemary
Foster, Don (Bath)Mackinlay, Andrew
Foster, Michael Jabez (Hastings)McNulty, Tony
Foster, Michael J (Worcester)Mactaggart, Fiona
Gapes, MikeMcWalter, Tony
George, Rt Hon Bruce (Walsall S)Mahon, Mrs Alice
Gerrard, NeilMarsden, Gordon (Blackpool S)
Gibson, Dr IanMarshall, David (Shettleston)
Gilroy, Mrs LindaMarshall, Jim (Leicester S)
Godsiff, RogerMarshall—Andrews, Robert
Goggins, PaulMartlew, Eric
Golding, Mrs LlinMaxton, John
Michael, Rt Hon AlunSimpson, Alan (Nottingham S)
Michie, Bill (Shef'ld Heeley)Skinner, Dennis
Milburn, Rt Hon AlanSmith, Rt Hon Andrew (Oxford E)
Miller, AndrewSmith, Miss Geraldine (Morecambe & Lunesdale)
Mitchell, Austin
Moffatt, LauraSmith, Llew (Blaenau Gwent)
Moonie, Dr LewisSoley, Clive
Moore, MichaelSouthworth, Ms Helen
Morgan, Ms Julie (Cardiff N)Spellar, John
Morris, Rt Hon Ms Estelle (B'ham Yardley)Squire, Ms Rachel
Starkey, Dr Phyllis
Morris, Rt Hon Sir John (Aberavon)Steinberg, Gerry
Stevenson, George
Mountford, KaliStewart, David (Inverness E)
Mowlam, Rt Hon MarjorieStewart, Ian (Eccles)
Mudie, GeorgeStoate, Dr Howard
Mullin, ChrisStrang, Rt Hon Dr Gavin
Murphy, Denis (Wansbeck)Stuart, Ms Gisela
Naysmith, Dr DougStunell, Andrew
O'Brien, Bill (Normanton)Taylor, Rt Hon Mrs Ann (Dewsbury)
Olner, Bill
Organ Mrs DianaTaylor, David (NW Leics)
Pearson IanTaylor, Matthew (Truro)
Pendry, Rt Hon TomTemple—Morris, Peter
Pike Peter LThomas, Gareth R (Harrow W)
Pond, ChrisTimms, Stephen
Pope, GregTipping, Paddy
Pound, StephenTodd, Mark
Powell, Sir RaymondTonge, Dr Jenny
Prentice, Ms Bridget (Lewisham E)Trickett, Jon
Prentice Gordon (Pendle)Truswell, Paul
Primarolo, DawnTurner, Dennis (Wolverh'ton SE)
Prosser, GwynTurner, Dr Desmond (Kemptown)
Quinn, LawrieTurner, Neil (Wigan)
Radice, Rt Hon GilesTwigg, Derek (Halton)
Twigg, Stephen (Enfield)
Raynsford, Rt Hon NickTyler Paul
Reed, Andrew (Loughborough)Tynan, Bill
Rendel, DavidWalley, Ms Joan
Robertson, John (Glasgow Anniesland)Wareing, Robert N
Watts, David
Robinson, Geoffrey (Cov'try NW)White, Brian
Roche, Mrs BarbaraWicks, Malcom
Rogers, AllanWilliams, Rt Hon Alan (Swansea W)
Rooker, Rt Hon Jeff
Rooney, TerryWilliams, Alan W (E Carmarthen)
Ross, Ernie (Dundee W)Wills, Michael
Rowlands, TedWinnick, David
Roy, FrankWinterton, Ms Rosie (Doncaster C)
Ruddock, JoanWoodward, Shaun
Russell, Bob (Colchester)Woolas, Phil
Russell, Ms Christine (Chester)Worthington, Tony
Ryan, Ms JoanWright, Anthony D (Gt Yarmouth)
Salter, MartinWyatt, Derek
Sanders, Adrian
Savidge, MalcolmTellers for the Ayes:
Sedgemore, BrianMr. Mike Hall and
Shaw, JonathanMr. Gerry Sutcliffe.
NOES
Ainsworth, Peter (E Surrey)Brooke, Rt Hon Peter
Amess, DavidBruce, Ian (S Dorset)
Ancram, Rt Hon MichaelBurns, Simon
Arbuthnot, Rt Hon JamesClappison, James
Atkinson, Peter (Hexham)Clarke, Rt Hon Kenneth (Rushcliffe)
Baldry, Tony
Beith, Rt Hon A JClifton—Brown, Geoffrey
Bell, Martin (Tatton)Cormack, Sir Patrick
Bercow, JohnCurry, Rt Hon David
Beresford, Sir PaulDavies, Quentin (Grantham)
Blunt, CrispinDavis, Rt Hon David (Haltemprice)
Boswell, TimDuncan, Alan
Bottomley, Peter (Worthing W)Evans, Nigel
Bottomley, Rt Hon Mrs VirginiaFabricant, Michael
Brady, GrahamFraser, Christopher
Brazier, JulianGarnier, Edward
Gibb, NickO'Brien, Stephen (Eddisbury)
Gill, ChristopherÖpik, Lembit
Gillan, Mrs CherylOttaway, Richard
Green, DamianPaice, James
Greenway, JohnPaterson, Owen
Grieve, DominicPickles, Eric
Gummer, Rt Hon JohnPrior, David
Hamilton, Rt Hon Sir ArchieRandall, John
Hammond, PhilipRedwood, Rt Hon John
Hawkins, NickRobathan, Andrew
Hayes, JohnRobertson, Laurence (Tewk'b'ry)
Heald, OliverRoe, Mrs Marion (Broxbourne)
Heath, David (Somerton & Frome)Ross, William (E Lond'y)
Horam, JohnRuffley, David
Jack, Rt Hon MichaelSt Aubyn, Nick
Jenkin, BernardSalmond, Alex
Johnson Smith, Rt Hon Sir GeoffreySayeed, Jonathan
Shepherd, Richard
Key, RobertSimpson, Keith (Mid—Norfolk)
King, Rt Hon Tom (Bridgwater)Smith, Sir Robert (W Ab'd'ns)
Kirkbride, Miss JulieSoames, Nicholas
Laing, Mrs EleanorSpicer, Sir Michael
Lait, Mrs JacquiStanley, Rt Hon Sir John
Lansley, AndrewSteen, Anthony
Streeter, Gary
Leigh, EdwardSwayne, Desmond
Letwin, OliverSyms, Robert
Lewis, Dr Julian (New Forest E)Tapsell, Sir Peter
Lidington, DavidTaylor, Ian (Esher & Walfon)
Lilley, Rt Hon PeterTaylor, John M (Solihull)
Lloyd, Rt Hon Sir Peter (Fareham)Taylor, Sir Teddy
Llwyd, ElfynThomas, Simon (Ceredigion)
Loughton, TimTredinnick, David
Lyell, Rt Hon Sir NicholasTrend, Michael
McCrea, Dr WilliamTyrie, Andrew
MacGregor, Rt Hon JohnViggers, Peter
McIntosh, Miss AnneWaterson, Nigel
MacKay, Rt Hon AndrewWells, Bowen
Maclean, Rt Hon DavidWhitney, Sir Raymond
McLoughlin, PatrickWhittingdale, John
Madel, Sir DavidWigley, Rt Hon Dafydd
Malins, HumfreyWilletts, David
Maples, JohnWinterton, Mrs Ann (Congleton)
Mates, MichaelWinterton, Nicholas (Macclesfield)
Mawhinney, Rt Hon Sir BrianYoung, Rt Hon Sir George
May, Mrs Theresa
Michie, Mrs Ray (Argyll & Bute)Tellers for the Noes:
Morgan, Alasdair (Galloway)Mr. Peter Luff and
Norman, ArchieMr. Stephen Day.

Question accordingly agreed to.

Clauses 17 to 22 ordered to stand part of the Bill.