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Competitiveness Council

Mr. Hood: To ask the Secretary of State for Trade and Industry what the outcome was of the Competitiveness Council on 11 March; what the Government's stance was on the issues discussed, including its voting record; and if she will make a statement. [161941]

Ms Hewitt: I represented the UK at the EU Competitiveness Council in Brussels on 11 March 2004.

The Competitiveness Council's contribution to the spring European Council was adopted. These conclusions covered the following priorities: integrated approach to competitiveness; enhanced competition through better functioning markets; regulatory reform; industry challenges and opportunities; research and innovation; employment and labour market reform; and mid term review of Lisbon agenda.

Council conclusions were adopted on stimulating entrepreneurship, business related services, and basic research.

No agreement was reached on the regulation for the community patent. The Presidency concluded, with disappointment, that they would have to carefully consider the next steps.

There was a Presidency progress report on REACH (Registration, Evaluation and Authorisation of Chemicals), and on the regulation for administrative co-operation in the enforcement of consumer protection laws.

An extension of the temporary defence mechanism for shipbuilding was agreed. This is an extension of the measure until the WTO dispute, between the Community and Korea, is settled.

The Presidency announced that the European Parliament had accepted the Council's amendments to the enforcement of intellectual property rights directive, and announced that the directive will shortly be adopted by written procedure.

The proposed directive for an internal market in services was discussed. I congratulated the Commission

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on this initiative, which should increase competition to the benefit of consumers and make manufacturing more competitive by reducing companies' costs.

There was an exchange of views on European space policy.

Energy Industry

Mr. Meacher: To ask the Secretary of State for Trade and Industry what the total value of tax reliefs and subsidies was in each year since 1990 for use in (a) nuclear, (b) oil, (c) gas, (d) electricity and (e) renewable industries. [157408]

Mr. Timms [holding answer 3 March 2004]: The information is as follows:

Tax relief

In arriving at the tax which companies pay on their profits, a range of reliefs apply, some of which are specific to particular taxes while others only apply under certain circumstances. The range of tax reliefs that can apply to oil, gas and generation of electricity (including through renewables) includes capital allowances; exemptions from the climate change levy; the R&D tax credit; and specific treatment for British Energy, and the North Sea oil and gas industry.

The main tax reliefs and their costs are listed in the December 2003 Tax Ready Reckoner and Tax Reliefs, which is available in the Library of the House and is published by HM Treasury at http://www.hm-treasury.gov.uk/media//AAB24/pbr03_trr.pdf. Aggregate figures for the economy-wide costs of the minor direct tax reliefs can be found on the Inland Revenue's website at http://www.inlandrevenue.gov.uk/stats/tax_expenditures/ menu.htm.

Given the range of activities undertaken by companies, to collect figures for the costs of tax reliefs given to specific industries would be too burdensome on business. It is only possible to provide such figures where tax reliefs apply solely to a specific sector (such as reliefs against petroleum revenue tax which is granted only to the North Sea oil and gas companies).

The Government have made the following specific provisions for the nuclear, oil, gas, electricity and renewables industries:

(a) Nuclear

The Government made provision in section 4 of the Electricity (Miscellaneous Provisions) Act for a tax disregard in respect of its proposed restructuring aid to British Energy. As the Secretary of State for Trade and Industry said in her statement to the House on 3 June 2003, the tax disregard, estimated at £0.9 billion, will not result in any extra cost to the Government. It has been provided to avoid a large tax charge hitting British Energy as a result of the proposed aid and thus the need for the aid to be correspondingly higher to achieve the same effect.

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(b) and (c) Oil and Gas

Information on reliefs against petroleum revenue tax granted to North Sea oil and gas companies for 2002–03 and 2003–04 can be obtained from table 7 of the December 2003 Tax Ready Reckoner. Figures are published twice a year and figures for earlier years can be obtained from the Library of the House. These reliefs are given against PRT only. Information on the PRT payments made by oil and gas companies is contained in Table 11.12 of the Inland Revenue's corporate tax statistics, at http://www.inlandrevenue.gov.uk/stats/corporate_tax/menu.htm.

(d) Electricity

The climate change levy was introduced in April 2001. In view of their environmental benefits, the Government announced that electricity from good quality combined heat and power plants (CHP) sold via licensed electricity suppliers would be exempt from the climate change levy. This exemption took effect from 1 April 2003. Electricity generated from coal mine methane (CMM)

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was also exempted for the same reason in November 2003. The cost of the exemption for good quality CHP is estimated at £15 million per year from 2003–04, and for CMM less than £3 million from November 2003 to April 2004 (recorded as a negligible cost to the Exchequer).

(e) Renewables

From introduction of the Climate Change Levy in April 2001, there were exemptions for electricity generated by new renewables such as wind and solar energy. These exemptions are estimated to have cost the Exchequer around £20 million per year from 2001–02 onwards.

Subsidies

Information about the total value of subsidies in each year since 1990 for use in nuclear, oil, gas, electricity and renewable industries are set out in the following table.

Support provided through the Non Fossil Fuel Obligation and the Renewables Obligation are not Government subsidies.

£ million

	Nuclear	Oil	Gas	Electricity	Renewables
	(a)	(b)	(c)	(d)	(e)	(f)	(g)
1990–91	1,265	0	0	0	21.3	6.1	0
1991–92	798	0	0	0	24.8	11.7	0
1992–93	864	0	0	0	26.6	28.9	0
1993–94	895	0	0	0	26.8	68.1	0
1994–95	892	0	0	0	20.5	96.4	0
1995–96	699	0	0	0	21.6	94.5	0
1996–97	0	0	0	0	18.5	109	0
1997–98	0	0	0	0	15.9	115.9	0
1998–99	0	0	0	0	14.4	113.7	0
1999–2000	0	0	0	0	14.9	41.9	0
2000–01	0	0	0	0	15.9	52.1	0
2001–02	0	0	0	0	24.1	70.2	0
2002–03	0	0	0	0	48.1	—	(24)277.9

⁽²⁴⁾ Gross est.

Notes:

Column (a):

Figures are based on the premium received by Nuclear Electric plc over and above the market price for electricity in the period 1990–96.

Grant in aid payments to UKAEA have not been included. These payments were to fund research and development in nuclear fusion which is likely to be many years from commercial exploitation, and to discharge UKAEA's own nuclear liabilities which arose from proving their technology rather than for commercial objectives. All UKAEA's reactors were experimental, and all are now closed.

The Government are supporting the restructuring of British Energy on the terms set out in the Secretary of State's announcement of 28 November 2002, including making available to the company a credit facility, up to a maximum of £200 million. There are currently no outstanding drawings on the facility.

Column (e):

These figures show direct Government funding for capital grants, research and development on renewable energy through the DTIs Sustainable Energy programme and through Research Councils.

Column (f):

This column shows expenditure through the Non Fossil Fuel Obligation (NFFO) for England and Wales.

Column (g):

The figure of £277.9 million for 2002–03 represents the value of the equivalent of the total Obligation on suppliers of 3 per cent. of electricity supplied. This equals 9,261,568 Renewables Obligation Certificates (ROCs) at the buy-out value of £30 per MWh. This figure includes the value of NFFO ROCs for which there was a surplus of £57.6 million in 2002–03.

Energy Suppliers (Disconnections)

Alan Simpson: To ask the Secretary of State for Trade and Industry what (a) guidance and (b) instruction is given to domestic energy suppliers on disconnection of vulnerable consumers from supply during the winter period; and what action is required of suppliers in terms of reconnecting vulnerable households in readiness for the winter period. [160246]

Mr. Timms: The regulation of gas and electricity supply, including any guidance or instruction to suppliers, is the responsibility of the Office of Gas and Electricity Markets (Ofgem). Under their licences, suppliers are required to prepare and submit for Ofgem's approval a Code of Practice and Guidance for dealing with customers in difficulty. In their codes, suppliers are required to set out ways in which they will

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seek to avoid the disconnection of premises occupied by customers with payment difficulties. In addition, suppliers are required, so far as possible, to avoid the disconnection of pensionable, disabled or chronically sick customers with payment difficulties between October and March. I understand that Ofgem is in discussion with suppliers about improving disconnection arrangements, particularly as they apply to vulnerable customers. These discussions will cover a range of matters affecting disconnections, including arrangements for re-connection.

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