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Sir James Molyneaux (Lagan Valley): I support the remarks by hon. Members representing the parties below the Gangway. On this and many other related issues, we have acted co-operatively and, dare I say, with a degree of integrity. Our position on this issue has remained constant through many battles.
7.15 pm
Without any bitterness, I tender a word of advice to Her Majesty's Opposition: perhaps it would be in their interest to withdraw their rather meaningless new clause 15. It is rather like saying, "When in doubt, call for a report." We all know exactly what that means and where it ends. There is also a whiff of another phrase that used to be bandied about on both sides: "That the Bill be read in six months' time." There is still time for the Opposition to withdraw their new clause.
I am beginning to regret my decision to retire at the general election, as I shall envy the young folk around me who will return full of vigour to a truly entertaining House of Commons--if today's events are anything to go by.
Ms Primarolo:
I shall speak directly to our new clause 15 and return to what is on the amendment paper rather than what might have been on the amendment paper but could not be because of an amendment to the law. At issue this evening is a serious debate about how we should deal with two issues: first, fuel poverty and how we can assist the fuel-poor; and, secondly, energy conservation. When dealing with the question of energy conservation and debates about that issue and about protecting the environment, it is important to recognise--as I am sure all hon. Members do--that environmental objectives may be achieved first, by fiscal measures; and, secondly, by direct regulation or investment in projects to assist the fuel-poor.
Despite the fact that there has been much comment about fuel poverty, new clause 13 does not deal with that issue. I shall return to that point later, as I have a feeling that hon. Members would like me to refer to that new clause. New clause 15 pursues the position that we supported last year: whether a variation of value added taxes on energy-saving materials will assist the objectives of energy conservation and of pursuing our environmental policies, and whether that is workable.
I remind the House that last year's amendment required the Treasury to define energy-saving materials and to consider a reduction of VAT on fuel. New clause 15 requires costings of the practical implications of varying the rate of VAT on fuel. If we could spend the same amount directly investing in people's homes and ensure that it was targeted at the fuel-poor, that would need to be considered.
Mr. Matthew Taylor:
As I understand it, the hon. Lady is saying that new clause 13 is technically imperfect. Given that the second part allows any Government to come up with an alternative scheme, could not the Labour party put pressure on the Government to do that? If Labour is in government in a couple of months' time, it will be able to come up with such a scheme in any case.
Ms Primarolo:
The hon. Gentleman has just shot himself in the foot by admitting that new clause 13 is not workable. We are trying to come up with a workable proposal. At present, I am speaking to new clause 15, not new clause 13.
The policy goal must be to encourage households, particularly those on low incomes, to invest or to have that done for them, to reduce their fuel bills, and a move towards sustainable development, which would combat fuel poverty, save fossil fuels, cut emissions and generate jobs. An example of that is the environmental task force that Labour would fund, which would specifically address fuel poverty, and it would be targeted to assist the most vulnerable.
There is, of course, no entirely satisfactory way to promote that goal solely through the variation of VAT on insulation materials. The creation of jobs is highly suspect in regard to a major proportion of the materials used, and the work to fit them is often undertaken by households or their friends. Therefore it is important that close regard is paid to how the variation of VAT could be used.
Mrs. Ewing:
The hon. Lady referred to the housing task force. Given the statement made by the executive of the Labour party at Inverness last weekend, what exactly does Labour mean when it talks about setting aside funds? Can she give a figure?
Ms Primarolo:
It means what it says: that the windfall levy will pay--[Laughter.] I am not surprised that Conservative Members laugh or that some hon. Members now speak in favour of an amendment for which they were not prepared to vote last year. Had they done so,
Mr. Alex Salmond (Banff and Buchan):
Will the hon. Lady give way?
Ms Primarolo:
If I could make some progress, I would be very grateful. I will not leave the hon. Gentleman out, as I am sure that he has a point to make against the Labour party.
Another difficulty is how to determine what qualifies as energy-saving material. We tried to set the Government that task last year, and we asked them to come back with a report this year. It is not unreasonable that that clarification is still necessary, because some building materials have insulation qualities, and if VAT is to be extended to those areas as well, we should know what the full extent is to be. I cannot understand why it is considered so unreasonable to ask for the exact potential.
We also need to consider exactly how we would define energy-saving materials, for instance, referring to the quality of the materials themselves. A good environmental objective would be that not only must the materials be energy efficient but the production of those very materials should be carried out in an energy-efficient way. It may not be possible to deal with all of those items simply through the amendment.
Mr. Salmond:
The hon. Lady said that there are Conservative Members who are prepared to vote tonight for something for which they were not prepared to vote last year. That is true, but it is also true that Labour Front Benchers are not prepared to vote tonight for something for which they were prepared to vote last year. What political lessons does she draw from that change of position?
Ms Primarolo:
I shall return to what is in new clause 13, because--
Mr. Nigel Evans (Ribble Valley):
She will write to you. [Interruption.]
Mr. Deputy Speaker:
Order. [Interruption.] Especially the second row on the Conservative Benches.
Every hon. Member who has taken part in the debate on the new clause has been given a reasonable hearing, and the hon. Lady has a right to the same.
Ms Primarolo:
If only I could just write to everybody.
New clause 15 seeks to assess properly the costs of going down that route, so that we can then compare it with alternative strategies to ensure that we maximise our objectives.
On new clause 13, my hon. Friend the Member for Nottingham, South (Mr. Simpson) has been incredibly ingenious--I congratulate him on that--but he has lost sight of what he was seeking to achieve. Every hon. Member who spoke in the debate referred to the poor and the consequences of fuel poverty on the poor. The new clause provides for income tax relief, which would be provided against income tax the year after, and subsection (4)(a) provides for that to be paid at 23 per cent. Therefore, anybody who is not paying income tax cannot
access the relief. Then, having put forward a proposition that does not reach the objectives that Members set in the important speeches in tonight's debate, the get-out clause, "If the Treasury does not like this, just reduce VAT on energy-saving materials," is no way to progress business in the House and to ensure--[Interruption.] Forgive me, but we are trying to create a system that is workable as opposed to scoring points against Labour's Front Bench.
Mr. Ian Pearson (Dudley, West):
I support my hon. Friend in the sense that we should make good law, and I have strong suspicions that, as drafted, new clause 13 is not good law. She said a moment ago that this applies to the 23 per cent. rate of tax. My understanding is that the lower rate would be 20 per cent. rather than 23 per cent. Will she confirm that not only will many people not qualify, but that one of the fundamental problems is that people who have never had to complete income tax returns will now come under a self-assessment regime, and all the cost savings from the energy-saving materials will be blown in accountants' fees to help them to fill in the forms?
Ms Primarolo:
My hon. Friend has made the point. Our new clause addresses the very issues that hon. Members have raised. It would enable an examination of the potential advantages of using a variation of VAT to deliver energy conservation measures. That has to be seen in parallel with the commitment to an environmental task force and the specific assistance given particularly to pensioners, who suffer because they cannot afford fuel.
Mr. Matthew Taylor:
Will the hon. Lady give way?
Ms Primarolo:
I have given way a number of times, so I shall not give way again.
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