Budget Statement

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Renewable Energy Equipment

9. Ian Lucas (Wrexham): If he will meet the Chancellor of the Exchequer to discuss fiscal incentives for the manufacture in Wales of renewable energy equipment.[49441]

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The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): The Chancellor's Budget announcements last Wednesday contained a number of incentives for renewable energy. They include enhanced capital allowances for business investment in energy saving technologies; exemption from the climate change levy for combined heat and power and coal mine methane projects; the first economy-wide emissions trading scheme; a fuel duty differential for sulphur free petrol and diesel; a fuel duty exemption for hydrogen; lower duty for bio-diesel; and a commitment to review the potential use of economic instruments to tackle household energy efficiency.

Ian Lucas: The list that my hon. Friend has outlined confirms the Chancellor's commitment to renewable energy. Wales's manufacturing industry, a tradition of which we are very proud, should treat the renewables obligation and the target of 10 per cent. of energy being produced from renewable sources by 2010 as a manufacturing opportunity. We should use it to ensure that we make products in Wales for industry and the domestic market, securing a firm manufacturing base for the future. The Chancellor of the Exchequer has made the commitment. Is it not right that industry in Wales should see that as an opportunity and seize it?

Mr. Touhig: I certainly hope that industry will see it as an opportunity. Indeed, I would commend to my hon. Friend and to industry in Wales a very good company in my constituency that designs and manufactures solar heating systems, which are very efficient for both housing and industrial purposes.

It is important, as we know from the performance and innovation unit report, to consider renewables as a major source of energy during the next 25 years. The debate on that report is now taking place and I hope that everybody will join in. We can make progress with that, particularly in Wales.

Lembit Öpik (Montgomeryshire): My hon. Friend the Member for Brecon and Radnorshire (Mr. Williams) and I have been working to see whether we can make Powys into the environmental capital of Britain. We are working with the Centre for Alternative Technology, schools, local firms and the public to do that. Generating energy is part of that. Will the Minister be prepared to provide support on behalf of the Government once we have completed our business plan so that we can proceed in a cross-party way?

Mr. Touhig: I shall be interested to see the work that the hon. Gentleman has carried out when he has completed it. Perhaps we will be able to set up a meeting then. If the Government can be helpful and supportive, working with our partners in the Assembly, we will certainly do that.

Mr. Jon Owen Jones (Cardiff, Central): Does my hon. Friend recognise that Britain is almost uniquely lucky in its capacity to produce large amounts of renewable energy? Within Britain, Wales is even more fortunate in being able to produce even larger amounts in proportion to its land mass. This is an opportunity for Wales. If we do not use it, the likely outcome is that we will be forced to reinvest in nuclear power,

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which is not an option that I, or, I think, most Members present, favour.

Mr. Touhig: I am not aware that any of the providers of nuclear power have any plans to renew, reinvest or invest further in it. However, I take the hon. Gentleman's point. Indeed, I have seen an exciting project off Rhyl Flats—an energy generating project that is well worth looking at. That will all form part of the debate that we are having following the PIU report. We must find ways in which to capitalise on a natural resource that we have in Wales—the wind and the sea coasts—to ensure that we have the right balance of energy sources over the next 25 years. I would not rule anything out at this stage.


10. Mr. Roger Williams (Brecon and Radnorshire): What discussions he has had with the National Assembly for Wales Secretary for Economic Development on the scale of tourism activity in Wales during the Easter period.[49442]

The Secretary of State for Wales (Mr. Paul Murphy): I have regular discussions with the Assembly Economic Secretary on a range of issues, including the tourism industry in Wales.

I very much welcome the indications from the Wales Tourist Board that attractions, accommodation providers and tourist centres across Wales have received a great many visitors over the Easter bank holiday weekend and since.

Mr. Williams: I, too, have received encouraging messages from tourist operators that they had a good Easter, boosted by the good weather that we experienced. None the less, there is concern about the future in the tourist industry, especially in businesses operating outside objective 1 and 2 areas. People are particularly worried about the way in which state aid rules affect the operation of the rural recovery fund and objective 2, inasmuch as individuals and organisations cannot receive more than £60,000-worth of public support over a three-year period.

At the last Welsh Question Time, the Secretary of State said that he would receive a delegation from people operating objective 2. Before then, will he take the opportunity to talk to colleagues in the Assembly about the operation of state aid rules? I refer in particular to the Beacons Trust, a group of individuals and businesses operating in the Beacons area, which wants to promote tourism and the use of local food but whose activities are constrained by the rules.

Mr. Murphy: I am grateful to the hon. Gentleman for his remarks. I represent the Brecon Beacons myself, as part of the Brecon Beacons national park falls inside my constituency. I am conscious of the impact of the foot-and-mouth epidemic on the hon. Gentleman's constituency and the tourist industry. I shall of course take up with the National Assembly the matters to which he referred and give him a reply on that matter. Equally, I am more than happy to receive a delegation from his constituency.

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Albert Owen (Ynys Môn): My right hon. Friend will be aware that many businesses in the tourist industry were playing catch-up this Easter after the devastation of foot and mouth. Does he agree that the additional resources in the possession of the Wales Tourist Board, to which my hon. Friend the Under-Secretary referred, should be used to appoint a tourist tsar to market areas such as my own that were devastated by the epidemic?

Mr. Murphy: I shall mention my hon. Friend's request to the First Minister—[Interruption.] I am not sure what the Welsh is for tsar, but I take my hon. Friend's point that there should be a fixed policy to ensure that as many people as possible, from the United Kingdom and from beyond our shores, come to his constituency and others in Wales that were affected so badly by the epidemic.

I was with my hon. Friend in Anglesey recently and we talked to tourist providers. They have been badly hit but I hope that this summer may bring an upturn in their fortunes. My hon. Friend is aware that the Assembly has devoted a great deal of attention and resources to this important matter.

Coal Subsidy

11. Adam Price (East Carmarthen and Dinefwr): What recent discussions he has had with ministerial colleagues regarding the extension of the United Kingdom Government coal subsidy regime to mine operators in Wales after 23 July.[49443]

The Parliamentary Under-Secretary for Wales (Mr. Don Touhig): My right hon. Friend and I meet ministerial colleagues regularly to discuss a range of issues.

The Government have no plans to extend the UK coal operating aid scheme beyond July 2002. The scheme was established to assist certain parts of the coal industry to overcome short-term market problems such as the lifting of certain restrictions on building gas-fired power stations, the introduction of NETA—the New Electricity Trading Arrangement—and historically low international coal prices. These issues should no longer be placing direct pressure on production. A mid-2002 end to the scheme is therefore entirely consistent with scheme objectives.

Adam Price: The Under-Secretary is aware that the European Coal and Steel Community Treaty expires on 23 July, but that a new treaty will unfortunately not be in place by that time. The Commission has allowed all coal-producing countries to extend the scheme until the end of the year while a new treaty is negotiated. The only member state that refuses to extend the scheme is the United Kingdom, despite the Government's previous statement that they wanted a level playing field. Would the Under-Secretary and the Secretary of State agree to an urgent meeting with the Minister for Industry and Energy and me to protect more than 100 high-paying jobs in my constituency, which is one of the poorest parts of Wales?

Mr. Touhig: No final decisions have been taken on coal state aids in the European Union. Negotiation on a new European framework is, as the hon. Gentleman rightly said, still under way. Our Government's

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position has been to continue to press for flexibility to pay suitable types of aid, investment aid in particular, should that be appropriate. I am aware of the hon. Gentleman's concern about Betws in his constituency, and I have seen the correspondence that he has had with Ministers in the Department for Trade and Industry and with my right hon. Friend the Secretary of State. We shall certainly agree to meet him about the matter. We want to do that, because it is of concern to his constituency and wider areas of the United Kingdom. We want to be as well informed as

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we can on the matter so that we can assist in any way possible.

The Chairman: Order. That brings us to the end of questions. It might be helpful if I remind hon. Members of the timing of the debate. We now have two hours until 1 o'clock. We shall then meet again at 4 o'clock and have another two hours until 6 o'clock. Hon. Members might want to bear that in mind when we see how many people want to speak.

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