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Single Payment Scheme

9. Mr. Mark Francois (Rayleigh) (Con): What discussions she has had with HM Revenue and Customs on the tax treatment of the single farm payment. [2609]

The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Jim Knight): There have been a number of discussions between DEFRA and Inland Revenue officials to clarify understanding of the rules governing the single payment scheme and related tax issues.

Mr. Francois: I thank the Minister for that reply. There has been a lot of criticism about the administration of the single farm payment during questions already today, but the Minister may know that the problem is compounded by further uncertainty about the tax status of the payment. Will he confirm whether it will be classified as farming income for tax
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purposes? If he is unable to give a definitive reply now, because he has to liaise with the Inland Revenue, will he at least undertake to give such an answer in writing by the end of the month?

Jim Knight: I thank the hon. Gentleman for the question, because I am aware of farmers' concern about the matter. Tax issues are of course a matter for my right hon. Friend the Chancellor of the Exchequer rather than this Department, but I am sure that the hon. Gentleman will be pleased to hear that a dedicated tax bulletin on the single payment scheme will be published on 24 June, and I trust that it will answer his questions.

Local Authority Housing (Energy Efficiency)

10. Mr. Stephen Hepburn (Jarrow) (Lab): What steps the Government are taking to encourage local authorities to improve energy efficiency in their housing stock. [2610]

The Minister for Climate Change and the Environment (Mr. Elliot Morley): The Government are reviewing the guidance issued to local authorities under the Home Energy Conservation Act 1995. We have set targets to ensure that all social housing is made decent by 2010, and we are encouraging councils to work in partnership with energy suppliers through the energy efficiency commitment and our funding of the Energy Saving Trust.

Mr. Hepburn: Is the Minister aware that homes waste about £5 billion-worth of energy a year and that a quarter of all harmful carbon emissions emanate from the home? Bearing it in mind that housing associations and councils run a quarter of the homes in the country, and that there is climate change and fuel poverty to consider, will the Minister use his influence to try to get them to do something about that?

Mr. Morley: My hon. Friend is right; we have made considerable progress on fuel poverty in the private sector. In the local authority sector, the insulation of something like 250,000 council homes has been upgraded. He is right that energy efficiency is an important key step in any strategy on reducing emissions and dealing with climate change. We are also reviewing building regulations—the new regulations will be out next year—and, in conjunction with the ODPM, looking at the findings of the sustainable buildings taskforce, which has particular potential to reduce emissions from housing.

Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op): The House will be aware of proposals from the Office of the Deputy Prime Minister for low-cost, affordable housing, which I am sure we all welcome. Will the Minister be ensuring that the low-cost housing provided under that scheme will be built to the highest energy-efficiency standards, so that the long-term costs take account of the needs that my hon. Friend the Member for Jarrow (Mr. Hepburn) outlined in his question?

Mr. Morley: Yes, I can give my hon. Friend that assurance. We are talking to organisations such as the
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Building Research Establishment about better standards of building. I had the opportunity of seeing some of the possible designs at the recent conference organised in Manchester by the ODPM. To have the very highest energy- efficiency standards does not add a great deal to the cost of new buildings, and even if there are additional costs, they are of course recovered by lower fuel bills over time.

Farming and Food Industry

11. Mr. Tim Boswell (Daventry) (Con): What steps she is taking to encourage the farming and food industry to expand domestic demand for its products. [2611]

The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Jim Knight): Our strategy is focused on helping industry adapt and build on its capacity to produce and deliver efficiently and sustainably what the market wants. By reconnecting farmers with the market, common agricultural policy reform, which we have discussed so much this morning, is key to ensuring that the farming industry can better respond to consumer demands and increase its competitiveness. In addition, our public sector food procurement initiative and support for the red tractor logo are examples of the Government's support for UK producers.

Mr. Boswell : I welcome the Minister to his new post and thank him for that reply. Does he accept that the key way forward for British agriculture is through increasing value added? That is important to British consumers every bit as much as it is to British farmers, and incidentally reduces the amount of unnecessary and wasteful movement of food between continents. In that spirit, and building on the work of Donald Curry and others, will he undertake on behalf of the Government to do every bit as much to support British agriculture in providing value added to British consumers as do European counterpart Ministers in support of their own industries?

Jim Knight: I certainly welcome that response. As ever, the hon. Gentleman takes an intelligent approach to these matters. The food and farming taskforce is addressing those issues, and I certainly agree with what he said.

Mr. Geoffrey Clifton-Brown (Cotswold) (Con): I also welcome the Minister to his new post; I am sure that he will have a very interesting time in DEFRA. One key thing that his Ministry could do to help British agriculture—I declare my interest as set out in the Register of Members' Interests—is encourage all public procurement bodies to purchase British food. Will his Ministry take an initiative in that respect and particularly address the Department of Education and Skills and the Ministry of Defence, which are large food procurement agencies?

Jim Knight: The public sector food procurement initiative that I mentioned, which was launched on 26 August 2003, is designed to do exactly that, within the rules that we all understand. I am sure that the hon. Gentleman will have read the Labour party's rural
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manifesto, which says clearly that, as part of the Government's commitment to schools, we will look through the school food trust to local farmers and suppliers for their produce wherever possible.

Renewable Transport Fuels

12. Mr. Jeremy Hunt (South-West Surrey) (Con): Whether it is her Department's policy to meet the European Union's 2 per cent. target for renewable transport fuels by 2005. [2612]

The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): The Government have set the UK's target at 0.3 per cent. use of biofuels by 2005. That amounts to about 12 million litres a month, which is a significant increase over current sales. It reflects the situation as the Government expect it to be with the current support. The key issue is not the 2005 target but the long-term development of the industry.

Mr. Hunt: Will the Secretary of State explain why, if she is so committed to encouraging the use of environmentally friendly biofuels, there seems to be a Sir Humphrey-like delay in instituting a renewable transport fuel order that would make that happen? It appears to have become bogged down in what is described as a feasibility study.

Margaret Beckett: I hardly think that it is consistent with evidence-based or sensible policy making to impose such an obligation without carrying out a feasibility study and consulting stakeholders. The hon. Gentleman is right because that is exactly what the Government are doing. We take seriously the potential of the renewable transport obligation, but I do not think that the House would expect the Government to take such a profound step without full consideration of all the options. I assure the hon. Gentleman that we are moving as speedily as we can, and we will report to the House as soon as we can.

Mr. Speaker: I call Mr. Caton.

Colin Challen (Morley and Rothwell) (Lab): It is Mr. Challen, Mr. Speaker. It has been a while since I last rose.

The Americans—we have to listen to them a great deal on climate change—claim that they have a 12 per cent. consumption rate of bioethanol. Will my right hon. Friend examine how they have achieved that—I know that there are specific reasons for it—to ascertain whether in our future review we can learn some lessons from them?

Margaret Beckett: I assure my hon. Friend that we are willing to learn lessons from any source that is useful and practical, and I take his point. As I think I said earlier to the hon. Member for South-West Surrey (Mr. Hunt), we are starting from an extremely low starting point. The target that we have set for 2005 is, from memory, about five or six times the present level of consumption. Some member states in the EU have not
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set any target at all for 2005. I assure my hon. Friend that we wish to make speedy progress on this directive and that we are willing to learn from anywhere.

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