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Non-food Crops

5. Mr. David Heath (Somerton and Frome): What measures she is taking to encourage sustainable markets for non-food crops. [101114]

The Minister for Rural Affairs and Urban Quality of Life (Alun Michael): We have provided £70 million to develop markets for biomass and a further £29 million

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to support the planting of energy crops. To encourage the market for transport biofuels, the Chancellor introduced a cut in the duty rate for biodiesel last July.

Mr. Heath : Given that the Curry report in January 2002 stated that

and that the area

have not the Government's activities been extremely disappointing? What happened to the non-food crops centre and the stimulus for not just the planting of non-food crops but plans for utilising them? Does the Minister really believe that the fiscal incentives so far for biofuel have been successful?

Alun Michael: I indicated the financial incentives that have been made available. We are establishing a new centre of excellence to bring together industry, academia and Government to create the conditions for successful technology generation and transfer with the aim of creating a market, to which the sustainable farming and food strategy clearly makes reference.

Brian White (Milton Keynes, North-East): Is my right hon. Friend aware that companies such as BP have said that they could use biofuels in their existing refineries but are experiencing problems in dealing with agencies such as Customs and Excise? In developing the new strategy, will my right hon. Friend ensure that relevant agencies are taken on board?

Alun Michael: I was not aware of that, but I shall be happy to look into it. It has been suggested that the use of biomass is one of the main contributors to the renewables generation mix, the aim being to meet the target of 20 per cent. of electricity production through renewables by 2020. It is important for that reason.

Mrs. Gillian Shephard (South-West Norfolk): The current round of World Trade Organisation negotiations will mean a collapse in the price of beet sugar produced in this country. What plans have the Government for the development of alternative uses for sugar beet, which will effectively become a non-food crop? Have they a co-ordinated approach to such plans, and if so which Department and which Minister are in charge?

Alun Michael: Some work has been done by the Central Science Laboratory, and, as I have said, an announcement has been made of the intention to cut the duty rate for bio-ethanol. Both those measures will, I think, be helpful.

Dr. Alan Whitehead (Southampton, Test): Is my right hon. Friend aware that biofuels can be added immediately to either petrol or diesel, causing a reduction of some 65 per cent. in carbon dioxide emissions? Does he accept that the development of a biofuel non-food crop market could have an immediate impact on climate change, and will he discuss with his

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colleagues in the Treasury, the Department of Trade and Industry and the Department for Transport how that market might best be introduced?

Alun Michael: I think my hon. Friend's essential point is that we are talking about the creation of a market. It is difficult for the creation of a market to be instant, but I assure my hon. Friend that my colleagues in the DTI and the Treasury share our wish for it to take place.

Sir Patrick Cormack (South Staffordshire): Will the Minister now answer the question asked by my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard)?

Alun Michael: The question asked by the hon. Member for Somerton and Frome (Mr. Heath) clearly involves different responsibilities. The Chancellor has responsibilities for duty, and my colleagues in the Department for Transport and the DTI have their own responsibilities. We at DEFRA are positively promoting the development of the market, which is why scientific and other research is being carried out. I would expect the hon. Member for South Staffordshire (Sir Patrick Cormack) to be more interested in those facts than in an over-simplistic question about who is in charge.

Mr. Peter Pike (Burnley): Given European Union enlargement and the changes we need to make in the common agricultural policy, is it not crucial to make biofuels successful? Is it not vital for us to have more discussions with the National Farmers Union and others to ensure that the changes succeed and the agriculture industry can survive?

Alun Michael: Indeed. The work being done is supported by organisations such as the NFU, and the EU biofuels directive is expected to set indicative targets that will help the development of the market to which a number of Members have referred.

EU Water Framework Directive

6. Mr. David Amess (Southend, West): What assessment she has made of the potential impact of the European water framework directive on UK industry. [101115]

The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Elliot Morley): The Government published an assessment in 2001, and we plan to publish an updated version later this year.

Mr. Amess : Does the Minister accept that the cost of implementation is expected to be known by 2015? What impact does he expect the directive to have on water pricing? Finally, can he clear up the mystery of why the directive makes no mention of the Water Bill with which the other place is currently dealing?

Mr. Morley: I can certainly deal with the last point. The Water Bill is not designed to implement the

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framework directive; it has implications for such things as abstraction management and water transfer, which will have a bearing on the framework.

I do not think there will be a big impact on consumer prices in the medium term. As the hon. Gentleman said, we expect the directive to be implemented in 2015 and some of the price implications to be known in about 2012. We are currently conducting a price review. There will clearly be price implications—I would not want to pretend otherwise—but a range of measures are being implemented in relation to water quality, ecological quality, pollution control and the nitrate directive, which will help us reach our target and will reduce the overall cost.

Dr. Stephen Ladyman (South Thanet): My hon. Friend will know that houses in many villages in Thanet and Dover are not yet connected to mains sewerage. Is there anything in the water framework directive or in the Water Bill that is being introduced along the Corridor to make it easier for water companies to put rural villages on to mains sewerage?

Mr. Morley: WS Atkins is conducting a survey on private sewerage, although I realise that that is not a complete link to my hon. Friend's question. The issue is a serious one in his constituency, and he has raised it assiduously on behalf of his constituents on several occasions. The situation in respect of costs and responsibility is complex and that is one of our considerations as part of the overall policy on water provision.

Mr. David Lidington (Aylesbury): Can the Minister confirm that the water framework directive requires that there be zero emissions of such substances as mercury, which is emitted into the earth's atmosphere by volcanoes, and of polyaromatic hydrocarbons, which emit from every combustion process known to man? Will the Minister indicate how on earth British industry is supposed to meet that impossible requirement?

Mr. Morley: With respect, the hon. Gentleman takes far too literal a view of the directive, although, as he rightly says, there will be trace elements of such chemicals. However, chemicals such as mercury are serious pollutants and we need to take action to try to minimise them. The water framework directive indicates the most appropriate and proportionate way of dealing with such issues and there is provision for reasonable derogations in its application. I do not think that the approach is as fundamental and unreasonable as was suggested.

Mr. Lidington: I am afraid that I hold to the old-fashioned view that one requires a literal reading of legislation that imposes penalties on either individuals or industries.

May I take the Minister back to the point raised by my hon. Friend the Member for Southend, West (Mr. Amess) on the possible costs to consumers? Does the Minister share the view held by a number of water companies that the costs of the directive to the water industry alone could be in the region of £4 billion to £4.5 billion and that it could lead to an increase in

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individual water bills of up to 10 per cent? That is the view of the water industry. Does the Minister disagree with that assessment and, if not, how does he propose to alleviate the additional stealth tax that it would impose on households?

Mr. Morley: I do not accept those figures, which I think the hon. Gentleman bases on Water UK projections. They include a range of costs resulting from directives that are currently going through, and will thus be an accumulating factor in meeting the water framework directive. At this stage, an accurate projection of costs is premature. Of course, we need some idea about them; that is why we produced impact assessments. There will also be further refinement of the figures in a report later this year.

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