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8 pm
Mr. Flight: I briefly take issue with two things that the Paymaster General said at the beginning of her remarks. First, she boasted of the Government's splendid record of consultation with business on this matter, but I remind her of the outrage felt by business when the original proposals were introduced by the Chancellor. They caused business's love affair with the Labour party to fall apart. As I commented earlier, it is fortunate for the good of the country that the Government have changed their mind.
Secondly, the Paymaster General is not taking the point that, in the past, offshore mixers worked. They enabled the UK to do extremely well in the multinational headquarters business. The time had come for something better, but it was not the case that a nagging problem had not been addressed.
However, I was glad to hear the Paymaster General's response. I may have missed something in one of the earlier debates on this matter, but she seemed to say a little more than she did in Committee. She did not respond completely to my main point--that businesses will have to restructure to move from offshore mixers to onshore pooling and that they must not be put in a void for a year while they wait for the issue to be resolved--but she went some way towards providing an answer to it.
The next Conservative Government will get on and deal with the matter. If that does not happen, the Paymaster General has promised that it will be dealt with in next year's Finance Bill. On that basis, I beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.
New Clause 5
Environmental protection rebates scheme
'(1) The Treasury may by order made by statutory instrument introduce a scheme of rebates to those persons charged with the aggregates levy and who have employed environmental protection measures in the process of commercial exploitation of aggregate;
(2) Environmental protection measures in this part are those measures which the Secretary of State shall by order determine to be in the interests of protecting or enhancing the environment;
(3) No rebate under this scheme shall be made unless the environmental protection measures:
(a) relate directly to the process of commercial exploitation of aggregate; and
(b) shall have been verified and certified by an external body prescribed for that purpose by the Secretary of State;
(4) A statutory instrument containing an order under this section shall not be made without prior consultation with those persons appearing to the Secretary of State to be representative of those having an interest in:
(i) the commercial exploitation of aggregate;
(ii) the protection of the natural environment;
(iii) the local communities affected.
(5) A statutory instrument containing an order under this section shall be laid before Parliament and approved by resolution of the House of Commons.'.--[Mr. David Heath.]
Brought up, and read the First time.
Mr. David Heath (Somerton and Frome): I beg to move, That the clause be read a Second time.
Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 1, in clause 16, page 12, leave out from line 18 to end of line 8 on page 41.
No. 3, in page 12, line 37, at end insert--
'(7) The provisions of this section shall cease to have effect on 5 April 2004 unless the Treasury makes provision by order made by statutory instrument for its continuation.
(8) The Treasury shall not make an order under subsection (7) above unless a draft of the order has been laid before Parliament and approved by resolution of the House of Commons.'.
No. 2, in schedule 4, page 102, leave out from line 18 to end of line 17 on page 143.
Mr. Heath: Returning to the aggregates tax seems like revisiting an old friend. The Financial Secretary will recall that I tabled an amendment and the new clause in Committee. They were connected: the amendment would have required the Government not to introduce the aggregates tax until they had introduced a rebate scheme, while the new clause would permit the Government to apply that rebate scheme to companies subject to the levy.
I shall not waste the House's time going over the arguments that I adduced in Committee. To my mind, they still hold true. I still believe that there is a serious design fault in the Government's proposals that will do enormous damage to the quarrying sector and to related industries, such as the concrete industry. Firms in my constituency, for example, will not benefit from the proposals.
The question before the House today is whether there should be a rebate scheme at all. What is the purpose behind the Government's proposed aggregates levy? We have heard the Government's justifications for it. The Budget 2000 statement said that the tax would generate
- "reductions in noise, dust, visual intrusion, damage to wildlife habitats and other environmental impacts."
- "the encouragement of recycling is the main tax purpose."
If the tax did that, it would be fine. However, I live in a quarrying area on the edge of the Mendips, and I know that it is far from obvious that the tax will bring with it any of the predicted benefits. It is also hard to see how it will improve the local environment.
The tax could easily improve local environments if there were a direct link between the performance of the quarrying companies in terms of what they do to protect or enhance the local environment and the protection of environmental amenities enjoyed by local residents. At present, residents suffer from all the ills that the Government cite as factors behind the introduction of the tax. The new clause would provide the appropriate mechanism to make the tax work. It would institute a system of rebate against the aggregates levy for companies prepared to take the necessary steps with regard to their processes, or to the infrastructure by which they quarry stone or transport it away. The new clause would reward that endeavour.
The Government's problem is that, without a rebate system, the tax will not achieve its stated objectives. That point has been made many times, in the House and outside it. Industry representatives and independent commentators share an opinion on this matter. The classic quotation is from Professor David Pearce, who is something of a guru when it comes to environmental taxes. I remember discussing his proposals in connection with the original Environmental Protection Act 1990. Mr. Chris Patten was Secretary of State for the Environment in the then Conservative Government, and he toyed with many of David Pearce's ideas, but did not bring many of them to fruition.
In July 1999, Professor Pearce conducted the only independent research into the proposal, and said that
- "we conclude that an aggregates tax is an extremely inefficient way to try and secure an environmental target."
-
That was his verdict, but it is not the end of the story. A rebate scheme would deal directly with the problems. New clause 5 covers the salient points. It provides that the Treasury could bring forward a statutory instrument to introduce the rebate scheme, but does not prescribe the exact form of that order. If the process turns out to be difficult, as the Financial Secretary has claimed, the new clause would permit time for the task to be accomplished. In Committee, I argued that the matter was urgent, but the urgency argument is not relevant to the new clause.
The new clause would link environmental protection measures to the process of commercial exploitation of aggregates, and tie them to the location of the quarrying. A criticism strongly voiced in my part of Somerset, and repeated in Leicestershire, Derbyshire and the other main quarrying areas, is that people do not see how they would benefit if an aggregates tax were introduced. They fear that the benefit would apply a lot further away, and not locally.
The new clause would also require that any benefit
- "should be verified and certified by an external body prescribed for that purpose"
That seems a sensible way forward. I cannot see that the Government would wish to produce any argument against that proposition, other than that it does not use their wording. If they intend to introduce a rebate scheme in the future--I sincerely hope that they do, and there is evidence that at least one other Department is keen on it--the new clause would provide them with a legal basis for doing so without bringing back to the House further primary legislation in the form of provisions included in a Finance Act or a separate Bill which would delay the process and make matters more difficult.
Even if the Government are not prepared to accept the words that I suggest, I hope that they will at least give a clear indication that they are committed to doing what they said they wanted to do and what they know they have to do to make the aggregates levy a genuine environmental tax rather than an imposition on the industry which has no direct environmental benefit and is to the detriment of the industry's commercial interests and competitiveness. The quarrying industry and those who are concerned about the local environment in the areas where quarrying takes place are waiting to hear from the Government a clear commitment that they intend to introduce this scheme and that it is being done as a matter of urgency. It would be absurd to introduce the aggregates levy without the only element that provides for local environmental benefit.
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