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Biofuels

8. Mr. Bob Blizzard (Waveney) (Lab): What assessment she has made of the economic viability of using crops for biofuels. [57027]
 
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Jim Knight): Bio-energy has an important role to play in supporting the Government's objectives for improving sustainability, reducing the impact of climate change, farm diversification and supporting rural jobs and areas. We have commissioned a report on the economics of energy crops, and it is expected to be published shortly.

Mr. Blizzard: As my hon. Friend knows, farmers have been asking for further duty reductions to make biofuels competitive with petroleum. With the tripling of the oil price, is biofuel now competitive and can we expect the bioethanol industry to take off? If so, do we have the vehicles to use bioethanol? In Brazil, they have so-called flex vehicles, which run on ethanol and petrol in the same tank.

Jim Knight: As my hon. Friend knows, because he takes such an interest in the issue, the renewable transport fuels obligation to achieve the 5 per cent. target by 2010 is causing the market to react positively. It is worth noting that if farmers grow such crops, they can claim on their land under the single payment scheme and energy aid, which is worth €55 a hectare.

Mr. Henry Bellingham (North-West Norfolk) (Con): The Minister will be aware of the vital role played by beet growers in the rural economy in Norfolk, Suffolk and Cambridgeshire. What does he think is the ideal level of duty on biofuels?

Jim Knight: European sugar regulations are being changed, which will allow sugar to qualify for the single payment scheme and energy funding, like other crops. I gather that British Sugar is planning a large development at Wissington to use sugar beet, which will no longer be exported. I look forward to the use of sugar in the production of energy and am sure that the level of duty is perfectly satisfactory, on which, if the Chancellor wants to make an announcement, he will do so.

Dr. Ashok Kumar (Middlesbrough, South and East Cleveland) (Lab): On Teesside, Tees Valley Biofuels recently announced that it is building a plant that will create 50 new jobs. Will my hon. Friend congratulate it on being so forward looking? What support and help can it expect from the Government, given the far-reaching nature of its achievement?

Jim Knight: I congratulate Tees Valley Biofuels on its achievement. I hope that it has been one of the beneficiaries of the £66 million in grants that we have given to enable the processing of biomass since 2003.

Water

9. Mr. Shailesh Vara (North-West Cambridgeshire) (Con): If she will make a statement on the current level of water supplies. [57028]

The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Jim Knight): The present general picture is of below-average river flows across England and Wales. Reservoir levels are normal
 
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for this time of year outside the south-east. The Environment Agency has produced a report, "Drought prospects 2006", explaining the likely consequences of a continuing rainfall deficit and recommending action by water companies and the public.

Mr. Vara: Although I welcome improvements in reducing the amount of water leaking from pipes, 3,649 million litres continues to leak every day. What measures are the Government taking to encourage water companies to deal with that problem?

Jim Knight: The effort that the hon. Gentleman has described is principally the responsibility of Ofwat. Significant progress has been made in reducing leakage since the peak in 1994. Most water companies are now at their economic level of leakage, which is the level at which further cutting leakage is more expensive than producing water from another source. Thames Water, which has been the subject of some concern, is now meeting the targets on leakage reduction in its three areas of operation.

Mrs. Sharon Hodgson (Gateshead, East and Washington, West) (Lab): Will my hon. Friend explain the thinking behind the policy on abstraction charges with particular regard to the fairness of water rate payers in the north-east subsidising water rate payers in the south-east?

Jim Knight: My hon. Friend will know that the Environment Agency is responsible for that and is looking into it. I am sure that it will note her comments.

Gregory Barker (Bexhill and Battle) (Con): Although 3 million homes are still under water restrictions from last summer, few people realise that nearly half the water extracted in England goes to serve not homes but large, centralised power stations. What assessment have the Government made of the impact that a far more ambitious policy of renewable decentralised energy would have on our water reserves? What input have DEFRA Ministers had into the current energy review as regards reducing the amount of water extracted by the big generators?

Jim Knight: I have noted with interest what the hon. Gentleman and his right hon. and hon. Friends have been saying about the generation of power from smaller units. It is interesting, and we have some sympathy towards it. The Environment Agency continues carefully to monitor demand for water, and the water companies themselves have a responsibility to plan 25 years ahead to ensure that the supply is there to meet demand. That is why four new reservoirs and three extensions are being planned.

Mr. Roger Gale (North Thanet) (Con): Southern Water is constructing an extension to the sewage treatment plant at Weatherlees in Thanet in order to raise the standard of effluent in east Kent in line with the measures required by the European Union. When that is complete, millions of gallons of virtually potable water will still be pumped daily into the sea at a time
 
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when there is a severe water shortage in the south-east. I suspect that that is repeated around the country. What measures is the Department taking to ensure that that practice ceases and that usable water is used for good purpose?

Jim Knight: I am grateful to the hon. Gentleman for raising the excellent work done under this Government on improving the quality of water pumped into the sea. Bathing water quality has improved significantly over the past nine years. I will ask my hon. Friend the Minister of State to write to the hon. Gentleman on his specific question about the re-use of water.

Single Farm Payments

10. Miss Anne McIntosh (Vale of York) (Con): What representations she has received on the payment of single farm payments in North Yorkshire. [57029]

The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Jim Knight): The Rural Payments Agency responds to all correspondence relating to the single payment scheme. As the scheme is not administered on a regional basis, it does not hold records on representations specific to North Yorkshire.

Miss McIntosh: Is the Minister aware that not a penny piece has been paid to any North Yorkshire farmer although the Minister promised that the bulk—96 per cent.—would be paid before the end of March? Indeed, that figure has now been reduced to a mere 50 per cent. Is he further aware that Scottish and Welsh farmers have been paid in full, with the perverse and distorting effect that they are outbidding North Yorkshire farmers for the cattle sold in our own marts?

Jim Knight: I have to remind the hon. Lady that today is 9 March. We will pay the bulk of payments by the end of March. I also have to inform her that the Welsh and Scottish Administrations are paying farmers in part, whereas in England we are paying them in full.

Mr. John Grogan (Selby) (Lab): Notwithstanding that answer, does my hon. Friend accept that there is real concern among farmers in North Yorkshire and the rural community about the performance of the Rural Payments Agency? Will he encourage it to be as transparent as possible in providing information on how many validations have been made and to treat sympathetically those farmers who face delays in payment because it has been unable to finalise its digital maps?

Jim Knight: We will certainly want to continue to look sympathetically at that. I have noted the comments made by my hon. Friend and other Members from Yorkshire. We gave farmers a year's notice and promised that we would begin payments in February. We have delivered on that promise despite all the noise we heard in this House and elsewhere suggesting that we would not. We are pretty pleased with that great effort, by which we have managed to deliver on our promise.
 
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