Clause 14 - Treatment of certain energy products

Finance Bill – in a Public Bill Committee at 3:00 pm on 6th May 2004.

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

Photo of John Healey John Healey The Economic Secretary to the Treasury

The clause amends section 10 of the Finance Act 1993 to provide a power to treat energy products in the same way as hydrocarbon oil or road fuel gas is treated under the Hydrocarbon Oil Duties Act 1979. The clause will update the legislation to take account of current and potential development of new energy products, which are made from animal and vegetable fats and non-synthetic methanol. The change is a consequence of the introduction of the European energy products directive, which gives a unified framework to the treatment of motor and heating fuels. The change will ensure that when new energy products are used as motor or heating fuels they will be dealt with under the 1979 Act.

Photo of Andrew Tyrie Andrew Tyrie Shadow Financial Secretary

I have one brief remark to make, which could equally have been made on the previous few clauses. There is nothing the matter with the clause, as far as we can tell. The trouble is that it is not clear that the Government have a coherent and easy-to-understand policy on the new energy products. Policy seems to be moving along in a makeshift way in different parts of Whitehall.

Not that long ago we were talking about bioethanol, and several times the question was raised of who is in charge with respect to issues concerning the new products. The reply was, ''There's some liaison going on.'' The word ''liaison'' reminds me of other words, often French, such as ''modality'', which lack content. I am guilty of that myself, I am sure. However, I do not think that there is much liaison going on in that area. If there is, it seems to be generating more heat than light.

We need joined-up government and we need somebody to think through the policy. To do that, someone must be put in charge of it. In my experience, that nearly always ends up having to be the Treasury, because the Treasury holds control over the key levers. Those are, of course, fiscal. That is what will decide how the industry develops. I strongly urge the Minister to build up his political muscles as quickly as possible to try to bring some clarity to bear.

The industry does not think that there is a coherent policy. It thinks that the Government are moving along on an ad hoc basis. I suspect that if we do not get this sorted out we will pay a price. It is, I acknowledge, difficult. Technology is constantly challenging any settled understanding of the area. I urge the Minister to give consideration to how he might, with the

honesty and integrity that he always demonstrates, answer the question of who is charge with something better than ''liaison''.

Photo of John Healey John Healey The Economic Secretary to the Treasury 3:15 pm, 6th May 2004

I am grateful for the hon. Gentleman's concern for my political muscle. I am not sure how welcome a fitness and development programme would be with my colleagues. I am content that the arrangements in Government are working well. I am particularly content that we in the Treasury, and I as the Minister responsible, have the scope to make the decisions that we need to make and to propose the sort of legislation before us.

Question put and agreed to.

Clause 14 ordered to stand part of the Bill.