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Mrs. Margaret Ewing (Moray): On a point of order, Mr. Deputy Speaker. May I point out that no one on the Front Bench appears to be listening to the significant points being made by my hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Morgan)?

Mr. Deputy Speaker (Mr. Michael J. Martin): So long as I am listening, that is the important thing.

Mr. Morgan: I thank you for your attention, Mr. Deputy Speaker.

I continue with the quote from the Scottish Executive, which I am sure everyone on the Front Bench listens to:

I ask Ministers not only to spare the blushes of the Scottish Executive, but especially to encourage the renewal of existing renewable energy supplies by reconsidering their current approach to those particular power stations.

10.15 pm

Mr. Denis MacShane (Rotherham): I should like to make a few comments on behalf of the United Kingdom's electric arc furnace users. Electric arc furnaces consume recycled material--scrap metal--to produce steel, but those steel producers are concerned about the climate change levy. I pay tribute to my hon. Friend the Financial Secretary for receiving many deputations and representations from the steel industry. However,

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although the levy has been negotiated down to help the industry--which is going through very great difficulties--one anomaly remains. I had planned to table an amendment on the anomaly, but prefer to make a few comments about it. I hope that my hon. Friend will reply to them.

I ask the Minister to consider narrowly the very few companies that use electric arc furnaces, which consume scrap metal--which is recycled material. There is a fear that, as currently formulated, the climate change levy will force the sector to close those furnaces and to use iron ore. It would be perverse if the tax, instead of encouraging the use of recycled material, caused the sector to return to raw iron ore to produce the steel that our economy wants.

I ask my hon. Friend the Minister to consider whether--when fine-tuning the Bill, before it goes to another place and becomes law--he might receive a delegation of me and other hon. Members representing the steel communities where electric arc furnaces are being operated, to discuss whether the legislation might take on board those considerations.

Mr. Jack: May I remind the hon. Member for Hazel Grove (Mr. Stunell)--who chastised Conservative Members for having no alternative to the climate change levy--not only of my own remarks in Committee, but of the answer to a parliamentary question that elicited the fact that we would save 2 million tonnes of CO 2 , which was the original target of the climate change levy, if the gas-fired power station moratorium were lifted and only one third of those power stations were built? If we achieved that saving, the Government would have no need for the bureaucracy that they are proposing. Conservative Members take entirely seriously the state of the planet. However, lifting the gas moratorium would deliver in a much more straightforward manner what the Government's great cumbersome tax is supposed to do.

In Committee, I also proposed a biomass alternative which, admittedly, needs more work. However, the conversion of 0.05 per cent. of the cultivable land area of the United Kingdom to short rotational coppice would, at a stroke, save more than 2 million tonnes of CO 2 . Recently, I received a letter from Shell International in support of that proposition.

Therefore, Conservative Members need no lectures from Liberal Democrat Front Benchers that we do not take the subject seriously and that we have no alternatives. I shall not make a lengthy speech now about the virtues of nuclear power--fuel for which comes from my own constituency--but simply say that nuclear power is CO 2 -free. However, the Government do not have a proper nuclear strategy.

I am speaking to this amendment to record once again, despite Government amendments, my deep disappointment that Ministers have done nothing to relieve the horticulture industry of a wholly unnecessary new tax. I am delighted to see my hon. Friend the Member for Broxbourne (Mrs. Roe) in the Chamber. On 15 June 2000, in an Adjournment debate, she reminded the House that the National Farmers Union had estimated that the climate change levy was effectively a tax of £3,750 per acre on glasshouses in this country.

The Government talk about competitiveness; I heard the Chancellor's speech today. If representatives of the glasshouse industry were in the same room as the

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Chancellor, they would think that he was from another planet. The climate change levy has visited on the glasshouse industry a tax that is wholly unnecessary for an industry that consumes its own output of carbon dioxide and has the potential for saving more.

The levy really does not apply and it makes the industry uncompetitive. There is no levy in Spain, Belgium, Ireland or Portugal. In the Netherlands, negotiations are taking place with the industry to reduce emissions, but no tax is envisaged. Here, however, the Government are imposing a tax on our horticulture industry which will diminish its competitiveness. At the same time, they claim to have the interests of British industry and commerce at heart.

In areas where the horticulture industry is important in employment terms, the levy is disproportionately important. When the Financial Secretary argues the case for the levy, he will put yet another nail in the coffin of the British horticulture industry. We and the industry will know who is responsible.

In Standing Committee, I put on the record, enterprise by enterprise, a list of small-scale businesses. The Chancellor said this afternoon that small-scale businesses were the engine room of our economy. It seems to me that the Government are stripping out the oil and the pistons, and they will soon be getting rid of the operator because the engine-room companies in the horticulture industry will have to bear a substantial extra burden which, as I said in Standing Committee, they cannot and should not bear. Even at this late stage, I make this appeal on behalf of the British horticulture industry. Instead of providing little tiny bits of help which do not address the issue, the Minister should recognise that the horticulture industry is genuinely a special case and find some way of absenting it from more than the proposed 50 per cent. reduction.

Mr. Christopher Gill (Ludlow): I shall speak briefly in support of the amendment. I find the case for the climate change levy quite unsatisfactory. We keep hearing from Ministers that it will be revenue neutral. It may be revenue neutral as far as the Government are concerned, but it certainly will not be for individual businesses. Although it could be claimed to be revenue neutral in respect of companies that are eligible for the rebate and employ a large number of people, as my right hon. Friend the Member for Fylde (Mr. Jack) has just said, it will be far from revenue neutral for companies that employ very few staff.

The hon. Member for Kingston and Surbiton (Mr. Davey) said that the climate change levy would not affect competitiveness. That is absolute bunkum. Any tax affects competitiveness. Last Thursday at Question Time, the Minister for Energy and Competitiveness in Europe tried to maintain that the levy would not affect competitiveness. The Government are living in cloud cuckoo land if they think that they can impose a tax that will not affect British businesses.

In effect, the climate change levy will impose a poll tax on employment, and its effect will be to export production that is currently carried out in Britain, and the jobs associated with it, to other parts of the world where environmental considerations are ignored. My right hon. Friend the Member for Fylde rightly mentioned other European countries where there is no equivalent of the climate change levy, or if there is, it is not being imposed in such a dramatic way.

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As was made clear on Second Reading, there are anomalies. For example, in several industries the prime producer is eligible for the 80 per cent. rebate, but processors in the same industry are not. That is totally unacceptable. The Liberal Democrat spokesman was good enough to admit that the tax was complicated. To my mind, that makes it a bad tax in any case, but the Government's assumption that companies and employers are not doing their level best to reduce the cost of energy is equally spurious. Everyone in business today realises that they have to keep bearing down on overheads. As energy is one of the most significant overheads, companies automatically bear down on energy costs without the incentive of the proposed tax.

This is a bad tax. It is a poll tax on jobs in this country, and I shall support the amendment.

Mr. Simon Thomas (Ceredigion): I say, with much regret, that Wales is plenty wet enough for hydro- electricity schemes. That is why, in my constituency, I have the largest hydro-electricity scheme in Wales and England.

I support the comments made by the hon. Members for Galloway and Upper Nithsdale (Mr. Morgan) and for Hazel Grove (Mr. Stunell). Hydro-electricity has been overlooked in the workings of the climate change levy, and I hope that the Government will review how the tax impacts on hydro-electricity schemes and the renewable energy that comes from it.

However, I hope that the Government will resist the amendment. I am sure that they need no encouragement from me to do that. The hon. Member for West Dorset (Mr. Letwin) correctly pointed out that the rate of carbon dioxide emissions was going down, but he did not go on to say that the emissions are expected to rise significantly again after 2005. That is not in the Red Book, but it is in the Government's predictions. That has been borne out by the royal commission on emissions, which issued its report last month.

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