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Mr. David Heathcoat-Amory (Wells): We--at least I--debated this issue with the hon. Member for Nottingham, South (Mr. Simpson) last year, myself from a different position, but I still have considerable regard for the hon. Gentleman. I admire him for his consistency, and the fact that he has always believed that one achieves a social end and an environmental end by making better use of our energy. I say the same about some Conservative Members who have always tried to bring together those two concerns into a programme to improve energy efficiency.
I very much share the aims of the hon. Member for Nottingham, South, and have done so ever since I served in the Department of Energy, now abolished, in which
I noted that we still waste a great deal of energy in this country, although very often the people who shout loudest about that do the least about it.
I am afraid that it is a hard fact that there are two main incentives to energy efficiency, the first of which is the weather. A cold winter focuses attention on energy efficiency--but the Government do not control the weather.
The other main factor is the cost of energy. It is a sad fact that many people, in their domestic circumstances, ask themselves how they might save energy only when the price is increasing. We have lived for some years at a time of low world fossil fuel prices. Moreover, the success of our privatisation programme has delivered major benefits to the electricity and gas industries, which have flowed through to consumers. That has been a tremendous social benefit to a great many people, but it is bad for energy efficiency.
The Opposition policy to reduce VAT on fuel from 8 per cent. to 5 per cent. would deal another blow to energy efficiency. I am not sure about the status of that promise or pledge or aim or aspiration, but we think that we have it from the Opposition Front Bench that it is Labour's aim, at least, to reduce VAT in that way. It will encourage further waste of energy unless something is done in the opposite direction.
I must make one or two remarks about new clause 13 that will be familiar to the hon. Member for Nottingham, South. Apart from being technically defective in several respects, the new clause overturns a major consideration of the Government: to simplify the tax system, to make it easy to administer and comprehensible to the public, and to further our attempt to reduce burdens on businesses, especially small businesses, if we can.
The proposals in the new clause would entail extremely difficult judgments, to be made by a person or an agency, between various types of energy-efficient materials, as against other equipment or materials that may claim to be energy efficient but might not measure up to such a standard. Someone would have to judge what qualified for such treatment.
Mr. Simpson:
Will the right hon. Gentleman acknowledge that, if the option under subsection (2) of the new clause were exercised by the Treasury--that is, if a direct reduction of VAT on energy-saving materials were pursued--it would both simplify the tax system and reduce the burden on industry in the way that he has advocated?
Mr. Heathcoat-Amory:
Yes, I concede that it would be rather simpler than the main proposal set out in the new clause. I say in parentheses that the hon. Gentleman
Even a straight reduction in VAT would complicate the tax system. We have a single positive rate of VAT in this country, with the exception of the 8 per cent. rate on fuel and power, which is fairly simple to administer because it is easy to define the fuels that qualify, and they are sold by a comparatively narrow range of outlets. However, materials listed in the new clause are sold in every high street hardware store or ironmonger.
Presumably the system would work as follows. An invoice would have to be certified, and made out by the retailer to the effect that the material concerned would or might qualify. There would be no certainty that the material would be installed properly.
If that problem is overlooked, there is still the problem of making repayments to a separate category of people as defined by reference to their status in the Inland Revenue system. We would rapidly be faced by a monstrous paperchase. The proposed system would be highly regulatory and burdensome to business and industry. My criticisms of last year, which I voiced from the Dispatch Box, seem still to be valid, and I recommend their acceptance by the House.
I promised, again from the Dispatch Box, that other ways would be pursued of trying to achieve the ends of which the hon. Member for Nottingham, South has spoken. I know that my words were taken up by those who followed me at the Dispatch Box, and by Ministers in the Department of the Environment.
Something has changed, however, since last year, and I shall end by drawing attention to it. The Labour party has performed a spectacular somersault, and in so doing has revealed breathtaking cynicism. Last year, the hon. Member for Bristol, South (Ms Primarolo) criticised the directors of Friends of the Earth, who had suggested that the Labour party might abstain on the issue. She said that there was no question of abstention. She added that she would ask all hon. Members to vote for a rather similar clause in the name of justice, jobs, democracy and energy efficiency. The hon. Lady was patently insincere in saying that.
A similar scheme has been advanced this year, but suddenly it is not all about justice, jobs, democracy and energy efficiency. Instead, it is now all about the hon. Lady's election chances. She has had a fit of responsibility, like all the poodles who sit behind her, who are not all in the Chamber this evening. They were leaned on to take their names off the amendment. They have meekly fallen into line. That gives a rather disconcerting glimpse of what a future Labour Government might be like--shallow, opportunistic, contradictory, unprincipled and, at root, cowardly.
That contrasts with the approach of the hon. Member for Nottingham, South. I hope that I am not embarrassing him by praising him in this way. Although I disagree with many of his political principles, at least he has shown consistency on these issues, as has my hon. Friend the Member for South Suffolk (Mr. Yeo), who has pursued the issues that are now before us over many years. I cannot help but draw a distinction between the records of the hon. Gentleman and of my hon. Friend and the somersault that has been completed by the Labour party.
I reject the new clause with a certain reluctance, because I am aware of the motives that lie behind it. I can at least be glad that the whole episode has educated us further on what the new Labour party is really like.
Mr. Matthew Taylor (Truro):
The objective of reducing the cost to the consumer of energy-saving materials has received wide cross-party support. In various ways, well over half the Members of this place have signalled their support for the measures in the new clause. I congratulate the hon. Member for Nottingham, South (Mr. Simpson) on his extraordinary vigour and determination, and not a little ingenuity. It is not easy to get around the rather arcane procedures, if you will allow me to say that of them, Mr. Deputy Speaker, that govern the way in which the House deals with Finance Bills.
There is clear support from hon. Members on both sides of the House, because they know that the outcome would be good for industry and would help to create jobs. Perhaps more important, we have before us a simple and relatively inexpensive measure which, if implemented, would start to tackle the problems of global warming, which have been acknowledged by right hon. and hon. Members. Those problems are recognised by Governments throughout the world. Anyone who does not accept the argument that stems from those problems would not accept anything that I am saying and, equally, would not support the new clause. As I have said, however, the clause is broadly supported.
The new clause would help enormously those with low earnings who are living in damp, cold homes that they cannot afford properly to heat. We know that, every winter, people in this country--mainly, elderly people--die of hypothermia in their homes. In simple terms, that is virtually unknown in any other part of western Europe. For many years, other western European countries have built homes to standards of insulation that are way beyond our own. In many instances, they have colder climates. The people of those countries have no difficulty in affording to heat their homes, because costs are very low.
In that context, it is bizarre that the House should have created a position in which the use of fuel--that is a bad thing in itself, because no one benefits from the use of fuel--is subject to a lower rate of tax than that which applies to fuel conservation, which can help the environment and help people to stay warm. We are in a position to correct that anomaly this evening.
The right hon. Member for Wells (Mr. Heathcoat-Amory), speaking on behalf of the Government when he was Paymaster General, promised to look into ways of achieving a reduction in the cost of energy-saving materials. Here is a chance for the Government to act positively. That applies also to the Labour party, which, until Friday, I thought was in favour of reducing the cost of energy-saving materials. After all, 240 Labour Members had signed an early-day motion calling for the reduction in the cost of such materials. The entire Labour Front-Bench team voted in that way a year ago. Together, working across the House, we came within one vote of defeating the Government on that occasion. We could be almost certain of doing so now, given the Government's changed position, having lost their majority in the House.
Last week, however, I was told that Labour had withdrawn its support. I was told also that Labour Whips were asking Labour Back Benchers to withdraw their support. Yesterday morning, for just a moment, I thought that everything was all right and that I had heard ugly rumours bearing no relation to the truth. In an interview published yesterday by the national energy authorities, the Labour energy spokesman, the hon. Member for Leeds, West (Mr. Battle), said:
Labour's Treasury team should not be afraid. Its members should have no problem voting for the new clause, because it sets out their policy. Only a couple of months ago, the right hon. Member for Dunfermline, East (Mr. Brown) said:
"as regards energy saving materials, we actually supported the amendment to the last Budget to equalise VAT rates for energy saving materials so I think our intention is plainly staked out there."
That intention has certainly been staked out, but the road to the election is paved with good intentions. It now seems that the hon. Gentleman and the rest of his Front-Bench colleagues will let the Government off the hook. Staring victory in the face, Labour Front-Bench spokesmen opt for a U-turn.
"Taxation is not neutral in the way it raises revenue. How and what government tax sends clear signals about the economic activities they believe should be encouraged, and indeed discouraged, and the values they want to entrench in society. For example, work is something to be rewarded through the tax system, whereas environmental pollution is something that should be discouraged."
How right the right hon. Gentleman is, or rather was.
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