| Fossil Fuel Levy Bill [Lords]
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The Chairman: Order. I remind the hon. Lady that she can only paraphrase, rather than quote, the proceedings of another place. Mrs. Gillan: I am most grateful for your guidance, Mr. Welsh. I was about to paraphrase, but I did say that I was about to quote, so I take your admonition in the way in which it was intended. The Minister gave the impression that the nomenclature of the Bill was rather tangled and convoluted. The Opposition have tabled the amendment in the spirit of the noble Lord's comment. I hope that it will fall on fertile ground. Clause 1(3) of the Bill gives the Secretary of State powers to make regulations to apply to all electricity suppliers. Hon. Members are still, to this day, in the dark about whether the power will be fully exercised. It follows that the Opposition tabled the amendment in the interests of accuracy. It would therefore bear the Minister's serious consideration. The Committee has had some debate about the Bill's extent. It may be helpful for me to remind the Committee of the section in the Electricity Act 1989 that the Bill seeks to amend. Under section 33 of the Act, power is given to the Secretary of State to make regulations to enable him or her to impose a levy on a supplier, for the levy to be collected and for sums to be paid out of that money to suppliers. The section contains arrangements specifying the calculation of the amount to be paid, and provision that the amount to be paid by a relevant person
I am sure that the Minister is familiar with that, but I know that some members of the Committee are perhaps not entirely familiar with the full wording of section 33. The section contains arrangements for dealing with advance payments in specific periods, and to allow for calculation of the difference between the cost of generation and purchasing and the cost that would be incurred if the power has been generated by a station powered by fossil fuel. The Secretary of State also has the power to set the levy at a suitable level. In amending section 33, the Bill not only ensures that the levy covers the nuclear industry. It also allows the Government to extend the levy, if the Minister so wishes, to all types of renewable energy. The Opposition understand that the Government has not yet decided whether to exercise that power. We know that the Minister does not yet have a programme to exercise it. However, he expects Parliament to give him the power anyway. As my hon. Friends have remarked in various stages of the Bill's consideration, he is really asking for carte blanche to tax as and where he sees fit. We feel that that approach is unsatisfactory, especially because, if the levy is extended to all types of renewable energy, the Government will be taxing electricity generated by renewable energy so as to put money back into renewable energy. That begs the question of whether the policy is right. Surely, the proposal is one of the most preposterous that has been put before the House, as it seeks to tax renewable energy to support it. Mr. Ian Bruce: One important issue that relates to Parliament and to the amendment to which my hon. Friend is speaking is that a Bill that is based on a fossil fuel levy but which levies electricity is wholly wrong. It is very misleading. Hon. Members are not supposed to mislead within the House; the Bill misleads people outside it. If one looked through a list of Acts of Parliament, one would imagine that the Government were putting a levy on gas burnt in one's stove. They are not doing that; there is no levy on coal to burn on one's hearth. It is an electricity levy, not a fossil fuel levy. It is halfway to what I think that the Government will eventually get to--controlling taxes on all forms of fuel--because that is their nature. Mrs. Gillan: I am grateful to my hon. Friend for that intervention and I do not disagree with a single word. Indeed, this Minister intends to tax every process for generating electricity--unless he tells us otherwise. The term ``electricity levy'' is far more accurate as a description. Therefore, I hope that he will accept the amendment. If he does not, there is a danger that the Bill will appear deceptively innocent and innocuous, whereas it is a licence to tax all electricity as and when the Minister feels--perhaps as and when he feels that he needs to raise more money. The Bill is a tax on consumers. When the Minister responds to this group of amendments, will he tell the Committee whether he has had any conversations with the Minister for Competition and Consumer Affairs, the hon. Member for Edinburgh, South (Mr. Griffiths), about the effect of the Bill on consumers? We should be interested to know whether representations have been made to the Minister by his hon. Friend, because it is his responsibility to champion consumers, who will ultimately have to pay for the provisions in the Bill. Finally, I pray in aid the Minister's words on Second Reading. He said that, the Bill empowered the Secretary of State to make all electricity supplied by licensed electricity suppliers subject to the levy--not some, not part, not one class of supplier, but all electricity. Therefore, our suggestions are not only practical but go a long way to clarify the true purpose of the Bill. I turn to amendment No. 2. The Bill appears to give the Minister and his successors the power to tax at an arbitrary level, and in a different manner, each method of generating electricity. That discretionary power is unusual. A great act of faith is necessary if the House is to extend powers in this way to a Department and a Secretary of State. Before we take this leap into the dark, the Committee needs an assurance from the Minister that the levy will be uniform and will not discriminate between suppliers or classes of supplier, or between supplies or classes of supply. That is a reasonable request, which is contained in amendment No. 2. I hope that the Minister will address that point specifically again to give us the assurances that we seek. Mr. Bruce: Anybody outside the House who is listening to the debate might think that there is a real concern here. We know that the Government are worried about what will happen to deep-mined coal. The amendment gives the Government the power to say, ``We will charge a 50 per cent. levy on burning gas or having nuclear power, and that money will be given as a subsidy to people who are burning coal''. That would obviously be an excellent way for the Government to get out of being in hock to the mining unions and ensure that all those stockpiles are burned. Nothing in the Bill would stop the Government doing that. Mrs. Gillan: My hon. Friend expresses the crux of my argument far more openly that I could ever seek to do. He is right. We are seeking to ensure that there is no abuse of power by the Minister. I am not casting aspersions on the Minister or the Secretary of State, but how do we know that we shall be able to trust their successors?
12.30 pmOn Second Reading, my hon. Friend the Member for Runnymede and Weybridge summoned up the issue by asking the Minister to assure the House that he was not seeking to micro-manage the energy equation by applying the levy at different rates to different sectors of the energy industry. That was a valid point and it was not fully answered on Second Reading. I hope that the Minister will consider the amendment in the spirit in which it was tabled. It is a probing amendment to find out what he has in mind. We are not mind-readers and neither are people in the energy industry. We hope that the Minister will not leave us wondering what his intentions are. Amendment No. 6 seeks to exempt from the levy, electricity from pumped storage facilities which is generated from potential energy being created by the use of leviable electricity. We are concerned about the Bill's effect on hydro-electric projects. The amendment arises directly from the point made on Second Reading by my hon. Friend the Member for Runnymede and Weybridge. Surprisingly, the Minister and I might find that we have several views in common. I know that he shares with me, and probably all hon. Members, the view that environmentally friendly technologies and methods of electricity generation should be encouraged. However, in his wind-up speech on Second Reading, he acknowledged the point about double taxation made by my hon. Friend the Member for Runnymede and Weybridge and said that he would look into the matter. One of the purposes of the amendment--I shall leave it to my hon. Friends to extrapolate--is to find out what has happened to his investigation on that point. I hope that, when he replies to the amendments, he will let the Committee know how far he has progressed with his inquiries and whether he has reached any conclusions that would enable him to take action. In summary, we have tabled the amendments to ensure more transparency in the powers that the Minister wants to take. First, we want the title of the Bill more accurately to reflect its purpose and I hope that, following the remarks of the Front-Bench spokesman in the House of Lords, the Minister will accept those amendments. Secondly, we seek assurances on the way in which the Minister will exercise his powers over supplies. Finally, we want to probe the Minister's thinking on hydro-electric power, in particular pumped storage. I hope that the Minister will address all those points, as well as those that will be made by my hon. Friends in due course. I hope that some of our amendments will find favour with him. Mr. Stunell: I should like to speak in support of the amendments in my name--perhaps I should say in my names, because there are two spellings on the amendment paper. I refer to amendments Nos. 11, 9 and 10. On amendments Nos. 9 and 11, there is a real concern among Liberal Democrat Members about the underlying philosophy that has gone into the Bill--or, perhaps, has not gone into the Bill. Although this is a small, simple, technical Bill, the political context is one in which there has just been a major international conference on climate change. At the last election, the Labour party made quite specific promises and commitments which were renewed by the Prime Minister and the Deputy Minister in the run-up to Kyoto and were repeated after the Kyoto agreement. We were told that, as one of its political aims and policy targets, Britain would be making a significant reduction in CO2 emissions. Fundamental to that is ensuring that this is achieved in the generation of electrical power. We have a problem. The Bill seems to be entirely silent with regard to that requirement and, in some specific ways, will produce counter-productive results. The target that the Deputy Prime Minister repeated when he came back from Kyoto was that the United Kingdom would seek to reduce its CO2 emissions to 20 per cent. below the 1990 emission level by the year 2010. He said that in doing that, the Government would first work towards the basket target which was agreed for the European Union. Whether one goes for the 20 per cent., the European Union target figure or some intermediate, negotiated figure, there is no doubt that it will be necessary to make a serious further effort to reduce carbon dioxide emissions. That means that the power industry must make a serious effort to find ways of producing electricity which involve the emission of less carbon.
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| ©Parliamentary copyright 1998 | Prepared 24 February 1998 |
