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Mr. Wallace: We achieved the original concession from the Government in the Finance Act 1995 by a remarkable cross-party consensus involving the support not only of the Conservative party, the Labour party and the Liberal Democrats but of the hon. Member for North Antrim (Rev. Ian Paisley), who made a very lively speech.
I have no intention of making this a partisan matter. For the Treasury, the amounts involved are relatively small, and I should certainly welcome any review, from any quarter, of the islands' transport. I think that, tomorrow, the Minister and I can usefully discuss the matter further. I am glad that he realises that there are some genuine anomalies. As I do not intend to push the matter to a Division, I beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.
Sir Michael Spicer (South Worcestershire):
I beg to move amendment No. 27, in page 6, line 30, leave out '(6)' and insert '(7)'.
Madam Deputy Speaker (Dame Janet Fookes):
With this, it will be convenient to discuss the following amendments: No. 28, in page 6, line 39, at end insert--
No. 29, in page 7, line 4, at end insert--
No. 30, in page 7, line 11, at end insert
No. 31, in page 7, line 15, after first 'of', insert
No. 32, in page 7, line 23, after 'not', insert
No. 33, in page 7, line 30, at end insert--
No. 35, in page 8, line 4, after '(a)', insert
No. 36, in page 8, line 18, after 'not', insert
No. 37, in page 8, line 22, at end insert--
Sir Michael Spicer:
I should say that I am president of the Association of Electricity Producers. I am not quite sure what that might have to do with amendments on fuel, but I have been advised to make that declaration, just to be absolutely safe. I am raising the issues on behalf of a constituent, who has asked me to do so.
The amendments would give a small additional tax incentive for the use of diesel which is blended to reduce a specific group of pollutants--polycyclic polyaromatic hydrocarbons, known as PAH--which are suspected of inducing cancer. Later this year, the Department of the Environment is expected to classify PAH as a priority pollutant.
In this instance, the pollutant is attacked by blending diesel fuel with methylester, which is produced from rapeseed. Therefore, as well as attacking emissions suspected of being cancerous by reducing PAH compounds by a factor of 60, the blended fuel has an interesting renewable element. My amendments treat that low-cancer-risk compound in precisely the same manner as the Bill treats ultra-low-sulphur diesel in clause 7--all my amendments relate to clause 7--and simply tag on an additional exemption to the standard rate of tax.
In a letter dated 10 December 1996 to my constituent, Mr. Charles Fraser, of Dove International Ltd., the Treasury rightly expressed concern on two matters. First, it states:
Secondly, the letter states:
Therefore, there is no real difference between my proposals and the Government's proposals in clause 7 on low-sulphur fuel. My amendments build on the Government's proposals, thereby enhancing them. I therefore very much hope that, on reflection, the Minister will be able to accept them.
Mr. Oppenheim:
I am entirely at one with my hon. Friend the Member for South Worcestershire (Sir M. Spicer) in focusing on the need to reduce air pollution. An important part of the Budget's strategy has been to try to provide fiscal advantage to those using low-polluting fuels, such as low-sulphur diesel and liquid petroleum gas. We feel that one of the greatest detriments to people's quality of life, particularly in urban environments, is smoke emanating from vehicles. Much of that smoke is unnecessary, particularly because it comes from badly maintained diesel engines.
We do not feel that the amendments are the appropriate way forward, because of the cost. By concentrating available funding on low-sulphur diesel fuel--which is relatively cheap to produce compared to the fuel mentioned by my hon. Friend the Member for South Worcestershire--we will be able to maximise the benefit.
The problem with the fuel produced by Dove, which is a mixture of refined rapeseed oil and low-sulphur diesel, is that it is much more expensive than conventional low-sulphur diesel, and does not provide a perceptible gain in emissions. The fuel's extra production cost is about 3p to 4p, and it would require a subsidy of about 2.7p to bring it into line with regular low-sulphur diesel.
There is no clear evidence that Dove fuel is any less carcinogenic than other low-sulphur diesel fuels. That was another point in our consideration of the matter.
Sir Michael Spicer:
I understand the point about cost, but might it not be worth considering the matter--not now, but later--in relation to the money spent on renewable energy that does not necessarily produce a beneficial effect on the environment? In those terms, one might reconsider a form of renewable energy that potentially does have a very beneficial effect on the environment. In future, could not the matter be considered within the context of renewable energy and beneficial effect on the environment?
'(7) "low cancer-risk part-renewable blended diesel" means fuel of the description in Schedule 2B to this Act'.
'( ) £0.3416 a litre in the case of low cancer-risk part-renewable blended diesel;'.
'low cancer-risk part-renewable blended diesel or'.
'low cancer-risk part-renewable blended diesel or'.
'low cancer-risk part-renewable blended diesel or'.
'( ) after the definition of "light oil" there shall be inserted the following definition--
"low cancer-risk part-renewable blended diesel" has the meaning given by section 1(7) above;'.
'low cancer-risk part-renewable blended diesel or'.
'low cancer-risk part-renewable blended diesel or.'
'() After Schedule 2A to that Act (mixing of heavy oils) there shall be inserted the following Schedule--
1. Low cancer-risk part-renewable blended diesel is fuel which consists of--
(a) a blend of heavy oil containing not less than 22 per cent. by volume of kerosene which when blended conforms to the specification in paragraph 2; and
(b) not less than 3.8 per cent. and not more than 15.0 per cent. by volume of methylester which is derived from rapeseed oil which contains not more than 0.02 per cent. by weight of free glycerine and which conforms to such other specifications as the Commissioners may direct.
2. The specification referred to in paragraph 1 is a blend of heavy oil--
(a) of which not less than 60 per cent. by volume and not more than 72 per cent. by volume distils at a temperature of 250 degrees celsius;
(b) of which not less than 90 per cent. by volume distils at a temperature of 290 degrees celsius;
(c) which has a density at 15 degrees celsius of not less than 813 kilograms per cubic metre and not more than 819 kilograms per cubic metre;
(d) which has a minimum cetane number of 49;
(e) which contains not more than 0.0015 per cent. by weight of sulphur;
(f) which contains not more than 11.25 per cent. by volume of aromatic hydrocarbons and not more than 0.05 per cent. by volume of polycyclic aromatic hydrocarbons (containing three or more carbon rings); and
(g) which conforms to such other specifications as the Commissioners may direct.".'.
"The objective"
of clause 4
"is to secure improvements in air quality, particularly but not exclusively in urban areas".
I completely agree with the objective of improving air quality, and my amendment, like clause 7, simply furthers it.
"it was not our intention to favour any particular brand or formulation of fuel over another."
That is a perfectly reasonable constraint on the Bill. That intention is also why my amendment No. 37--a proposed schedule 2B--has been devised very precisely to define fuel generically, in terms of its low-cancer-risk effect. There is a generic element--certainly not a brand element--to the proposal, and it is based not on any particular compound but on the generic effect of reducing diesel's potentially dangerous emissions.
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