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Mr. Francois:
I have listened very carefully to the Minister’s case with regard to these important powers. He explained the background to what Her Majesty’s Treasury is seeking to achieve. Conservative Members appreciate the need to combat fraud, especially highly
organised fraud against elements in our VAT and tax credit systems. I am grateful for the Minister’s assurance that the powers will be used only for criminal, not civil, matters. That is an important assurance placed on the record in Hansard tonight .
Nevertheless, the number of officers that the Minister mentioned as having been given these powers was 6,500. I understand, however, that in the Treasury’s discussions with the professional groups, the limit was originally specified as 1,000. Then when the Treasury was pressed, it conceded that the figure might, at most, be 2,000. Now the Minister comes to the House and asks for 6,500 of these officers to be so empowered to arrest our citizens. We on the Conservative Benches feel that we need to place some constraint on that. We think that it is right that the powers should be given to specialised officers within HMRC, who are specially trained to use them.
Having listened to the Minister, I am minded to withdraw amendment No. 2, but to press amendment No. 20 to a vote, so that the powers would be confined to specially trained officers in HMRC’s criminal investigations directorate and HMRC could then choose to deploy some of them at the border posts if it saw fit. If the Minister thinks that he can tell the professional groups that there will be only 1,000 officers, then that there will be at most 2,000, and then come to the House and say, “Oops. I actually meant 6,500”, he should know that we think that perhaps he has not behaved as well as he might.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: No. 20, page 57, line 12, at end add—
‘(12) Any power of arrest conferred by a provision of this Act as it amends section 114 of the Police and Criminal Evidence Act 1984 shall, so far as it is exercisable by an officer of Her Majesty’s Revenue and Customs, only be exercised by an officer or officers serving in the Criminal Investigation Directorate of HMRC.’.— [Mr. Francois.]
Question put, That the amendment be made:—
The Committee divided: Ayes 118, Noes 279.
AYES
Ainsworth, Mr. Peter
Amess, Mr. David
Ancram, rh Mr. Michael
Arbuthnot, rh Mr. James
Atkinson, Mr. Peter
Baron, Mr. John
Bellingham, Mr. Henry
Binley, Mr. Brian
Blunt, Mr. Crispin
Bottomley, Peter
Brady, Mr. Graham
Brazier, Mr. Julian
Brokenshire, James
Burns, Mr. Simon
Burrowes, Mr. David
Campbell, Mr. Gregory
Chope, Mr. Christopher
Clappison, Mr. James
Clifton-Brown, Mr. Geoffrey
Davies, Mr. Quentin
Djanogly, Mr. Jonathan
Donaldson, Mr. Jeffrey M.
Dorrell, rh Mr. Stephen
Duddridge, James
Duncan, Alan
Duncan Smith, rh Mr. Iain
Dunne, Mr. Philip
Evennett, Mr. David
Francois, Mr. Mark
Fraser, Mr. Christopher
Garnier, Mr. Edward
Gauke, Mr. David
Gibb, Mr. Nick
Goodman, Mr. Paul
Gray, Mr. James
Green, Damian
Greening, Justine
Grieve, Mr. Dominic
Gummer, rh Mr. John
Hague, rh Mr. William
Hammond, Mr. Philip
Hammond, Stephen
Hands, Mr. Greg
Harper, Mr. Mark
Hayes, Mr. John
Heathcoat-Amory, rh Mr. David
Hendry, Charles
Herbert, Nick
Hermon, Lady
Hoban, Mr. Mark
Horam, Mr. John
Howarth, Mr. Gerald
Hunt, Mr. Jeremy
Hurd, Mr. Nick
Jack, rh Mr. Michael
Jackson, Mr. Stewart
Jenkin, Mr. Bernard
Johnson, Mr. Boris
Kawczynski, Daniel
Kirkbride, Miss Julie
Knight, rh Mr. Greg
Lansley, Mr. Andrew
Leigh, Mr. Edward
Lewis, Dr. Julian
Liddell-Grainger, Mr. Ian
Lilley, rh Mr. Peter
Loughton, Tim
Luff, Peter
Mackay, rh Mr. Andrew
Malins, Mr. Humfrey
Maples, Mr. John
May, rh Mrs. Theresa
McCrea, Dr. William
McIntosh, Miss Anne
McLoughlin, rh Mr. Patrick
Miller, Mrs. Maria
Milton, Anne
Moss, Mr. Malcolm
Murrison, Dr. Andrew
Neill, Robert
Newmark, Mr. Brooks
O'Brien, Mr. Stephen
Ottaway, Richard
Pelling, Mr. Andrew
Penning, Mike
Prisk, Mr. Mark
Randall, Mr. John
Redwood, rh Mr. John
Robertson, Hugh
Robertson, Mr. Laurence
Robinson, Mrs. Iris
Rosindell, Andrew
Ruffley, Mr. David
Scott, Mr. Lee
Simmonds, Mark
Simpson, David
Simpson, Mr. Keith
Soames, Mr. Nicholas
Spelman, Mrs. Caroline
Spink, Bob
Spring, Mr. Richard
Stanley, rh Sir John
Stuart, Mr. Graham
Swayne, Mr. Desmond
Syms, Mr. Robert
Taylor, Mr. Ian
Taylor, Dr. Richard
Tyrie, Mr. Andrew
Vara, Mr. Shailesh
Viggers, Peter
Villiers, Mrs. Theresa
Walter, Mr. Robert
Watkinson, Angela
Whittingdale, Mr. John
Wiggin, Bill
Wilshire, Mr. David
Yeo, Mr. Tim
Young, rh Sir George
Tellers for the Ayes:
Michael Fabricant and
Mr. Robert Goodwill
NOES
Abbott, Ms Diane
Ainger, Nick
Ainsworth, rh Mr. Bob
Atkins, Charlotte
Austin, Mr. Ian
Bailey, Mr. Adrian
Balls, Ed
Barlow, Ms Celia
Barron, rh Mr. Kevin
Battle, rh John
Bayley, Hugh
Beckett, rh Margaret
Beith, rh Mr. Alan
Benn, rh Hilary
Benton, Mr. Joe
Berry, Roger
Blunkett, rh Mr. David
Borrow, Mr. David S.
Breed, Mr. Colin
Brennan, Kevin
Brown, Lyn
Brown, rh Mr. Nicholas
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Burnham, Andy
Butler, Ms Dawn
Byers, rh Mr. Stephen
Byrne, Mr. Liam
Cable, Dr. Vincent
Caborn, rh Mr. Richard
Campbell, Mr. Alan
Carmichael, Mr. Alistair
Caton, Mr. Martin
Challen, Colin
Chapman, Ben
Chaytor, Mr. David
Clark, Ms Katy
Clark, Paul
Clarke, rh Mr. Charles
Clarke, rh Mr. Tom
Clelland, Mr. David
Coaker, Mr. Vernon
Coffey, Ann
Cohen, Harry
Connarty, Michael
Cook, Frank
Cooper, Rosie
Cooper, Yvette
Corbyn, Jeremy
Cousins, Jim
Creagh, Mary
Cruddas, Jon
Cryer, Mrs. Ann
Cummings, John
Cunningham, Mr. Jim
Cunningham, Tony
Curtis-Thomas, Mrs. Claire
Darling, rh Mr. Alistair
Davies, Mr. Dai
Dean, Mrs. Janet
Dhanda, Mr. Parmjit
Dobbin, Jim
Dobson, rh Frank
Donohoe, Mr. Brian H.
Dowd, Jim
Drew, Mr. David
Eagle, Angela
Efford, Clive
Ellman, Mrs. Louise
Engel, Natascha
Farrelly, Paul
Field, rh Mr. Frank
Fisher, Mark
Fitzpatrick, Jim
Flint, Caroline
Flynn, Paul
Follett, Barbara
Foster, Michael Jabez (Hastings and Rye)
Francis, Dr. Hywel
Gapes, Mike
Gardiner, Barry
George, Andrew
George, rh Mr. Bruce
Gibson, Dr. Ian
Gilroy, Linda
Godsiff, Mr. Roger
Goggins, Paul
Goldsworthy, Julia
Goodman, Helen
Griffiths, Nigel
Grogan, Mr. John
Gwynne, Andrew
Hall, Mr. Mike
Hall, Patrick
Hamilton, Mr. Fabian
Hanson, rh Mr. David
Harman, rh Ms Harriet
Harris, Mr. Tom
Havard, Mr. Dai
Healey, John
Heath, Mr. David
Henderson, Mr. Doug
Hendrick, Mr. Mark
Hepburn, Mr. Stephen
Heppell, Mr. John
Hesford, Stephen
Hewitt, rh Ms Patricia
Heyes, David
Hill, rh Keith
Hillier, Meg
Hodge, rh Margaret
Hodgson, Mrs. Sharon
Hoey, Kate
Hood, Mr. Jimmy
Hopkins, Kelvin
Horwood, Martin
Hosie, Stewart
Howarth, David
Howarth, rh Mr. George
Howells, Dr. Kim
Hughes, rh Beverley
Hughes, Simon
Huhne, Chris
Humble, Mrs. Joan
Iddon, Dr. Brian
Ingram, rh Mr. Adam
Irranca-Davies, Huw
Jackson, Glenda
James, Mrs. Siân C.
Jenkins, Mr. Brian
Johnson, Ms Diana R.
Jones, Mr. Kevan
Jones, Lynne
Jones, Mr. Martyn
Jowell, rh Tessa
Kaufman, rh Sir Gerald
Keeley, Barbara
Keen, Alan
Keen, Ann
Kelly, rh Ruth
Kemp, Mr. Fraser
Khan, Mr. Sadiq
Kidney, Mr. David
Kilfoyle, Mr. Peter
Knight, Jim
Kramer, Susan
Ladyman, Dr. Stephen
Lammy, Mr. David
Laxton, Mr. Bob
Lazarowicz, Mark
Levitt, Tom
Lewis, Mr. Ivan
Linton, Martin
Lloyd, Tony
Love, Mr. Andrew
Mackinlay, Andrew
Mahmood, Mr. Khalid
Mallaber, Judy
Mann, John
Marris, Rob
Marsden, Mr. Gordon
Marshall, Mr. David
Marshall-Andrews, Mr. Robert
Martlew, Mr. Eric
McAvoy, rh Mr. Thomas
McCabe, Steve
McCafferty, Chris
McCarthy, Kerry
McCarthy-Fry, Sarah
McCartney, rh Mr. Ian
McDonagh, Siobhain
McDonnell, John
McFadden, Mr. Pat
McFall, rh John
McIsaac, Shona
McKechin, Ann
McNulty, Mr. Tony
Meacher, rh Mr. Michael
Meale, Mr. Alan
Merron, Gillian
Michael, rh Alun
Milburn, rh Mr. Alan
Miliband, rh David
Miliband, Edward
Miller, Andrew
Moffat, Anne
Moffatt, Laura
Mole, Chris
Moon, Mrs. Madeleine
Moore, Mr. Michael
Morden, Jessica
Morley, rh Mr. Elliot
Mudie, Mr. George
Mulholland, Greg
Mullin, Mr. Chris
Munn, Meg
Murphy, Mr. Denis
Murphy, rh Mr. Paul
Naysmith, Dr. Doug
Norris, Dan
Olner, Mr. Bill
Osborne, Sandra
Owen, Albert
Paisley, rh Rev. Ian
Pearson, Ian
Plaskitt, Mr. James
Pound, Stephen
Prentice, Bridget
Prentice, Mr. Gordon
Prosser, Gwyn
Purchase, Mr. Ken
Raynsford, rh Mr. Nick
Reed, Mr. Andy
Reed, Mr. Jamie
Robertson, John
Robinson, Mr. Geoffrey
Rooney, Mr. Terry
Roy, Mr. Frank
Ruddock, Joan
Russell, Bob
Russell, Christine
Ryan, Joan
Sanders, Mr. Adrian
Seabeck, Alison
Sheridan, Jim
Simon, Mr. Siôn
Simpson, Alan
Singh, Mr. Marsha
Skinner, Mr. Dennis
Slaughter, Mr. Andy
Smith, rh Mr. Andrew
Smith, Angela E. (Basildon)
Smith, Geraldine
Smith, rh Jacqui
Snelgrove, Anne
Soulsby, Sir Peter
Southworth, Helen
Spellar, rh Mr. John
Starkey, Dr. Phyllis
Stewart, Ian
Strang, rh Dr. Gavin
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Mr. Gerry
Taylor, Ms Dari
Taylor, David
Teather, Sarah
Thomas, Mr. Gareth
Thornberry, Emily
Timms, rh Mr. Stephen
Tipping, Paddy
Todd, Mr. Mark
Touhig, rh Mr. Don
Trickett, Jon
Truswell, Mr. Paul
Turner, Dr. Desmond
Turner, Mr. Neil
Twigg, Derek
Ussher, Kitty
Vis, Dr. Rudi
Waltho, Lynda
Ward, Claire
Wareing, Mr. Robert N.
Watts, Mr. Dave
Whitehead, Dr. Alan
Wicks, Malcolm
Williams, Mrs. Betty
Williams, Hywel
Wills, Mr. Michael
Winnick, Mr. David
Winterton, rh Ms Rosie
Wishart, Pete
Wood, Mike
Woodward, Mr. Shaun
Wright, Mr. Anthony
Wright, Mr. Iain
Wright, Dr. Tony
Wyatt, Derek
Tellers for the Noes:
Mr. Michael Foster and
Jonathan Shaw
Question accordingly negatived.
Clauses 81 to 83 ordered to stand part of the Bill.
Clause 84 ordered to stand part of the Bill.
Julia Goldsworthy: I beg to move amendment No. 15, in page 15, line 10, leave out sub-paragraph (b).
The Chairman of Ways and Means (Sir Alan Haselhurst): With this it will be convenient to discuss the following: clause 20 stand part.
Amendment No. 16, in clause 21, page 15, line 29, leave out sub-paragraph (c).
Amendment No. 17, page 16, line 5, leave out sub-paragraph (c).
New clause 1— Microgeneration etc.
‘(1) The Chancellor of the Exchequer must, within one year of the passing of this Act and annually thereafter, prepare and publish a report on such fiscal measures he considers appropriate to assist with—
(c) small scale local energy generation.
(2) In preparing the report under subsection (1), the Chancellor of the Exchequer shall take reasonable steps to consult local authorities and such persons as in his opinion have an interest in—
(a) enhancing the United Kingdom contribution to combating climate change; and
“microgeneration” has the same meaning as in section 82 of the Energy Act 2004;
“small scale local energy generation” means generation of energy—
(a) in the case of electricity, generation by plant not exceeding 20 megawatts, and
(b) in the case of heat, production by plant not exceeding 100 megawatts thermal.’.
And the following amendment thereto: (a), in subsection (2), after ‘persons’ insert
‘including, in particular, Government Departments’.
Julia Goldsworthy: Although we are covering quite a lot in this group of amendments, I shall try to be brief.
I begin by referring the House to comments made on Second Reading by the hon. Member for Wolverhampton, South-West (Rob Marris), who is not in his place at the moment, about the need for a carrot as well as a stick in encouraging environmental behaviour. The amendments and the new clause relate to clauses 20 and 21. In the Budget, it was announced with a great fanfare that people who produce electricity on domestic property through microgeneration would be exempt from income tax and, furthermore, that that exemption would extend to the sale of renewable obligations certificates. That announcement included income tax as well as any capital gains tax that people might otherwise have been liable to pay.
Paragraph 7.43 of the Red Book states:
“as announced in the Pre-Budget report, Finance Bill 2007 will legislate so that, where an individual householder installs microgeneration technology in their home for the purpose of generating power for their personal use, any payment or credit they receive from the sale of surplus power is not subject to income tax”.
The Red Book goes on to explain the freedom from income tax and capital gains tax for ROCs.
Those measures in the Budget were accompanied by another announcement in the Chancellor’s speech of further investment in the low-carbon buildings programme and that grants for the installation of microgeneration technology will be increased by another £6 million. That announcement was in response to the massive popularity of the scheme, which was demonstrated by events on 1 March 2007 when the domestic grant allocation went on the first day of the month. I see that you are looking at me somewhat quizzically, Sir Alan. That point relates to our amendment (a) to new clause 1, which I will explain in due course—I promise you that I shall be
brief, Sir Alan. Rather than increasing capacity, those events led to the suspension of the low-carbon buildings scheme for April. To date, the scheme is still not up and running.
Amendment (a) would introduce into new clause 1 a requirement on the Chancellor to consult Departments. We tabled the amendment because the low-carbon buildings programme and the extension of funding to it was such a mess. Perhaps the Treasury did not inform the Department of Trade and Industry that it was planning to make such a generous offer, even though the industry itself had asked for an extra £15 million to deal with the popularity of the scheme. Because the DTI was not informed, the programme has been suspended rather than extended, and capacity has been reduced as a result, because members of staff are being laid off as a result of the suspension.
On the face of it, the provisions appear to fulfil the principle that the Chancellor outlined in his Budget speech, but there are significant limitations in terms of the qualifications placed on the exemption from income tax. Clause 20(1) says:
“No liability to income tax arises in respect of income arising to an individual from the sale of electricity generated by a microgeneration system”.
Paragraph (a) says that it must be domestic microgeneration. That seems fair. However, paragraph (b) says that it must be the case that
“the individual intends that the amount of electricity generated by it will not significantly exceed the amount of electricity consumed in those premises.”
The phrase about intention as to the amount of electricity generated crops up again in clause 21 in relation to obligation certificates. The exemption from income tax applies only if someone intends not to generate more electricity than is required.
The point of the amendments is to ask the Minister why he thinks it necessary to include that qualification, given that the existing definition of “microgeneration” makes clear the limits of the income tax relief. Section 26 of the Climate Change and Sustainable Energy Act 2006 says that
“‘microgeneration’ means the use for the generation of electricity or the production of heat of any plant”.
It then lists the sources of energy and technologies that must be used through microgeneration systems: biomass, biofuels, fuel cells, photovoltaics, water, wind, solar power, geothermals and combined heat and power systems. It also defines the capacity by a microgeneration system: 50 kW for the generation of electricity and 45 kW thermal for the production of heat. Given that, why is it necessary to introduce a further qualification whereby an individual installing a domestic microgeneration system has to intend that they are not going to exceed significantly the amount of electricity consumed?
If it is blowing a gale in the middle of the night, does that mean that the energy production of someone with a wind turbine will significantly exceed their requirements and they will therefore be unable to extend their exemption from income tax to the electricity generated in that situation? Surely we should be encouraging people to maximise the capacity of their microgeneration systems so that we are not placing such great demands on the national network
and on non-renewable energy sources. I do not understand why the Treasury thinks it necessary to introduce the qualification with regard to intention.
There is a practical issue as regards how the exemption from income tax will be measured and achieved. I notice that the Red Book contains no projections of the cost to the Treasury of providing it. Friends of the Earth raised a concern that it does not understand how its achievement can be physically measured. It said that, if the exemption were part of a wider scheme, with a roll-out of smart meters, it would be easier to do something. The chief executive of Scottish Power said that the policy would be meaningless without a wider roll-out of smart meters. Does the Chief Secretary intend to make the policy more meaningful?
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