10 Mar 2011 : Column 71WS

10 Mar 2011 : Column 71WS

Written Ministerial Statements

Thursday 10 March 2011


ECOFIN (15 March 2011)

The Chancellor of the Exchequer (Mr George Osborne): The Economic and Financial Affairs Council will be held in Brussels on 15 March 2011. The following items are on the agenda:

Economic Governance

Ministers will be asked to reach agreement on a package of legislative measures intended to strengthen economic governance in the EU, particularly the euro area, to address the challenges of the sovereign debt crisis, while fully respecting the provisions in the UK’s protocol to the treaty.

Climate Finance

Ministers will adopt Council conclusions on climate finance. The conclusions welcome and reaffirm the commitments on climate finance agreed at the UN negotiations in December 2010. The Government support these conclusions.

Stability and Growth Pact Implementation

Ministers will exchange views on the latest fiscal plans provided by Hungary and Poland in the context of their excessive deficit procedures (EDP). No formal conclusions are foreseen on this item.

Office of Tax Simplification

The Exchequer Secretary to the Treasury (Mr David Gauke): The Government launched the Office of Tax Simplification (OTS) in July 2010 to provide independent advice on simplifying the tax system.

The Chancellor tasked the OTS with identifying areas of the tax system that cause the most day-to-day complexity for small businesses, recommend priority areas for simplification and consider the impact of these recommendations on different business sectors.

The OTS was also asked to identify the complexities surrounding the intermediaries legislation widely known as IR35 and to consider simpler approaches that ensure that any income that is effectively employment income is fairly taxed.

Today the OTS has published its interim report in which they identify structural complexities in the tax system and put forward their provisional recommendations on ways the Government might be able to pursue their simplification. The OTS also presents evidence on complexity caused by IR35 and options for the Chancellor to consider.

The Government will respond to this report at Budget on 23 March 2011. A copy of the report has been deposited in the Library of the House.

10 Mar 2011 : Column 72WS

Independent Public Service Pensions Commission (Final Report)

The Chancellor of the Exchequer (Mr George Osborne): Lord Hutton has today published the final report of the Independent Public Service Pensions Commission.

I invited Lord Hutton to undertake a fundamental structural review of public service pensions and make recommendations on future public service pension provision. The Government are grateful for the work of Lord Hutton and the staff of the commission and will now give careful consideration to his recommendations. The Government are also committed to continuing to engage with people working in the public sector, trade unions and others in taking forward the implementation of any future reforms.

The Government stand by their commitment given at spending review that there is no race to the bottom of the pension provision, that public service pensions should remain a gold standard and that public service pensions should continue to provide some form of defined benefit.

The report is available in the Vote Office and the Printed Paper Office and it has been deposited in the Libraries of both Houses. The report is also available on the Commission’s website at: http://www.hm-treasury.gov.uk/indreview_johnhutton_pensions.htm.

Communities and Local Government

The Planning Inspectorate and Major Infrastructure Planning

The Minister of State, Department for Communities and Local Government (Greg Clark): I am announcing further detail on the Government’s plans to replace the Infrastructure Planning Commission (IPC) with a Major Infrastructure Planning Unit within the Planning Inspectorate. This unit will examine and make recommendations to Ministers on all major infrastructure applications on transport networks, ports, energy, hazardous waste and water.

Leadership of the Planning Inspectorate

The leadership of the Planning Inspectorate will change from 1 April 2011. The current chief executive, Katrine Sporle, is due to retire at the end of March. Katrine has made a significant contribution to the Planning Inspectorate and was awarded a CBE for outstanding public service earlier this year. I would like to record my thanks to her for her role in building the Planning Inspectorate’s reputation and for its successful track record during her tenure.

I am pleased to announce that Sir Michael Pitt, chair of the IPC, has agreed to increase his working hours and take on the additional role of chief executive of the Planning Inspectorate from 1 April 2011. Sir Michael Pitt is an experienced chief executive and I am confident that he will approach his new role with the energy and commitment required to make the transition a success.

Following Royal Assent of the Localism Bill and the closure of the IPC, Sir Michael Pitt will remain chief executive of the Planning Inspectorate. He will oversee

10 Mar 2011 : Column 73WS

the changes to the infrastructure planning regime and ensure that the new integrated Planning Inspectorate delivers an excellent service across its range of responsibilities.

Transitional arrangements for applications in the system

I would like to confirm my intention to retain the current cadre of commissioners appointed to examine major infrastructure applications until September 2014. This will ensure continuity and stability through the transition. They will form part of a single group of professionals that will work across the whole range of applications and appeal casework that the Planning Inspectorate will consider.

By retaining the skills of commissioners, I can confirm that major infrastructure applications in progress at the point of transition will be handled by the same individuals and that they will not be subject to any delay. Moreover, applicants should be reassured that ministerial decisions will be made in line with the existing statutory time scale of 12 months.

These arrangements will offer the strong leadership and valuable stability which will provide applicants with the confidence they need to bring forward applications.

Our continued commitment to the major infrastructure planning regime

The new major infrastructure planning regime is still in its early stages with the first applications under the Planning Act 2008 having only recently been accepted for examination. The Government’s commitment to create a Major Infrastructure Planning Unit with all decisions taken by Ministers will restore democratic accountability to the system while retaining the existing approach, expertise and statutory timetables of the current major infrastructure planning system. On this basis we now have the right model to meet the Government’s objectives to promote infrastructure growth and security, facilitate investment for the UK economy and ensure that the decisions we make on these large projects have the stamp of legitimacy. This is the right arrangement for a major infrastructure planning system in the 21st century.

The regime will be:

a front-loaded regime with clear opportunities for local communities to engage throughout the process;

a regime where the policy is clearly set out in national policy statements providing certainty and predictability;

a speedy and efficient regime, with in-built statutory timetables, which delivers robust results; and

a democratically accountable regime which allows Parliament to approve national policy statements and Ministers to determine all infrastructure applications of national importance.

This model will ensure high-quality applications come forward that can be examined and determined quickly in line with set timetables. The Government recognise however, that the 2008 Planning Act regime is new and substantially different from the multiple and overlapping regimes it replaced. We are therefore listening to industry, representative groups and others using the system for the first time and will be exploring opportunities for improvement to ensure the system has the right mix of certainty, flexibility and efficiency.

10 Mar 2011 : Column 74WS

Review of Coalfield Regeneration (Government Response)

The Minister for Housing and Local Government (Grant Shapps): In 2010 the previous Government initiated a review of coalfields regeneration to help inform future policy in this area and the review chaired by Michael Clapham was completed in September last year. This response sets out the coalition Government’s commitment to provide continuing support to communities in these areas and to make locally led regeneration the central feature of the new approach, driving growth and helping local leaders to strengthen their economic potential and support communities.

The Clapham review found that some communities were still in need of specific intervention in tackling the key continuing inequalities of the coalfield areas. They had a need for continued provision of targeted coalfields funding and for that funding to be more effectively co-ordinated. The review also suggested that local authorities should have a central role to play in the next phase of coalfields regeneration, and that a small grants or loans scheme was needed to help businesses struggling to access funding in the current economic climate.

Government welcome the review and accept the strong case it makes for targeted support to help the most challenged coalfield areas achieve a basis on which they can go forward as self sustaining communities. The Government are committed to helping local communities in overcoming health and skills inequalities and in developing the leadership to drive forward their own plans for economic growth and community renewal. The overriding need to reduce expenditure nationally to help tackle the fiscal deficit means that funding will be less than in the past. It will need to be closely targeted at the most deprived areas and in helping communities to develop plans which are not reliant on public subsidy in the future. Government will invest in realistic plans for locally led growth intended over time to bring coalfield areas up to the levels of economic activity in the adjoining areas.

The response sets out measures in four key areas:

Funding for the coalfields regeneration trust, with a total of £30 million over two years and potential for further funding in years three and four as part of transition to a self-funded body. This will enable it to lead a new partnership programme for coalfield areas to focus on key issues including health inequalities and community support and to continue to support small projects in individual communities;

Funding of around £150 million to complete over time remaining investment projects in the HCA coalfields programme which are commercially realistic and in line with local priorities;

Giving local authorities greater flexibilities and a key role in determining priorities for local HCA investment and advising on asset transfers;

Creating a new small business start up fund as part of the coalfield regeneration trust programme working with enterprise fund and other coalfields partners to provide small loans to business start ups in the most challenged areas.

The report has been placed in the Library of the House.

Energy and Climate Change

Renewable Heat Incentive

The Secretary of State for Energy and Climate Change (Chris Huhne): I am announcing today the publication of the policy document which sets out details of the

10 Mar 2011 : Column 75WS

renewable heat incentive (RHI) to support technologies including biomass, ground source and water source heat pumps, solar thermal and biomethane. Heating accounts for 47% of total UK final energy consumption and 46% of our carbon emissions. We already have the renewables obligation and feed-in tariffs schemes to help drive an increase in renewable electricity, evidenced by the recent expansion in wind farms and domestic solar panels. Similarly we have the renewable transport fuel obligation, to help transform our transport fuel use. The introduction of the RHI will for the first time provide long-term guaranteed financial support for renewable heat installations.

Under the RHI, organisations using renewable heat will receive quarterly payments for 20 years from the date they enter the scheme. In addition to support for new installations, organisations which installed eligible renewable heat equipment since 15 July 2009 will also qualify for support under the RHI.

The scheme will be introduced in two phases. In the first phase, long-term tariff support will be targeted in the non-domestic sectors, at the big heat users—the industrial, business and public sector—which contribute 38% of the UK’s carbon emissions. Under this phase there will also be support of around £15 million for households through the renewable heat premium payment. The second phase of the RHI scheme will see households moved to long-term tariff support similar to that offered to the non-domestic sector in the first phase. This transition will be timed to align with the green deal which is intended to be introduced in October 2012.

The household technologies supported under the first phase of this scheme will be monitored to enable Government, manufacturers, installers and individuals to better understand how to get maximum performance from them in real-life situations in people’s homes. Given the current economic climate it is more important than ever that this scheme delivers value for money and ensures there is a fair spread of technologies across a range of property types. That is what the renewable heat premium payments will provide; they ensure that before we commit to long-term payments in a sector where it is particularly difficult to predict levels of take-up—and levels of performance—of different heat technologies, we manage their roll-out and learn more about them, as well as controlling the budget and ensuring the money goes where it is intended. Domestic equipment installed during this period will be eligible for the RHI tariff payments when they are introduced in 2012. At this point we will also consider introducing support for a number of other technologies and fuels which are not supported from the outset. The RHI represents a serious investment in our future and offers significant benefits:

it supports emerging technologies and businesses in the UK;

strengthens security of supply through increased diversification of heating fuels and reducing dependence on one or two fuels only;

reduces carbon emissions and contributes to our legally binding renewables target; and

contributes to the Government’s commitment to introduce measures to promote a huge increase in energy from waste through anaerobic digestion.

Further details of the scheme can be found in the RHI policy document, which is available in the Libraries of both Houses.

10 Mar 2011 : Column 76WS

We are also today publishing text for the draft regulations that will underpin the tariff scheme. These are a working draft and will be subject to change before they are laid in Parliament. We will consider comments from stakeholders on their practical application. We are looking to seek parliamentary approval of the regulations in July 2011 and will introduce the tariff scheme thereafter. The scheme which provides premium payments for the domestic sector will start in July. Details about this phase will be published in around two months time.

Foreign and Commonwealth Office

Overseas Territories

The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague): Our overall vision is for our territories to be vibrant and flourishing communities, proudly retaining aspects of their British identity and generating wider opportunities for their people. We want to cherish the rich environmental assets for which, together, we are responsible.

We will continue vigorously to uphold the principle of self-determination and to ensure the continued security of all the overseas territories. We set this commitment out clearly in the strategic defence and security review. We want to help the territories plan their future in a competitive and unpredictable world. We will help territories that are struggling economically to avoid unnecessary financial dependence on the UK. We will help territories that now rely on UK financial support to reduce their dependence and pursue the path towards economic sustainability. We will ensure a sustained and robust British presence in our uninhabited territories to protect them for future generations.

We are determined that the situation we have found in the Turks and Caicos Islands is not repeated, there or elsewhere. We therefore want to work with territories to make sure the right controls are in place to ensure good governance and sound management of public finances.

I am clear that, as well as seeking greater engagement with the territories from all Government Departments, the FCO must increase the resources allocated to this important work. Despite our challenging spending review settlement I have ensured that this is so. As I informed Parliament on 1 February, I have decided to increase the overseas territories programme fund to £7 million per year. I have ensured the resources available to run the overseas territories network are maintained at a level that will permit the upgrading of a number of governorships which were downgraded in recent years. This will help ensure that we are able to recruit governors with the skills and experience to do these unusual and challenging jobs.

In addition, I have reallocated resources in the current financial year to help rectify some of the budgetary weaknesses that have emerged in some territories in recent years.

Most importantly, and mindful of the recommendations of the Foreign Affairs Committee, I have approved a discretionary grant of £6.6 million to the Turks and Caicos Islands Government to reimburse the costs incurred in the past year pursuing corruption and violent crime.

10 Mar 2011 : Column 77WS

This is for the special investigation and prosecution team; related civil recovery work; and the Royal Turks and Caicos Islands police. My officials have co-ordinated this carefully with DFID’s work to underpin the territory’s public finances.

This is an exceptional case. Our basic principle remains that it is an integral part of good governance for a territory Government to ensure that the criminal justice system is properly funded. Territories should not look to the UK to fund criminal investigations or prosecutions that they are reluctant to pursue themselves. But the burden in this case has been exceptional. The fiscal rescue package put in place by DFID should enable future costs to be met from the Turks and Caicos Islands Government public purse in the normal way.

I have also approved the following smaller grants.

£1 million to the British Indian Ocean Territory (BIOT) Administration to strengthen the territory’s reserves. This is necessary in the face of rising costs of operating the BIOT patrol vessel. These funds will also enable the Administration to support new measures to help Chagossians visit the territory for humanitarian purposes and to contribute to environmental work in the territory. In this context, I would also like to inform the Committee that the BIOT Administration has concluded an agreement with the Blue Foundation and the Bertorelli Foundation by which the Bertorelli Foundation will donate £3.5 million over the next five years to offset the loss of fisheries revenue that has flowed from the establishment of a full no-take marine protected area. I am most grateful to these foundations for their generous support.

£1 million to the Government of South Georgia and South Sandwich Islands to strengthen their reserves in the face of recent reductions in fisheries revenue.

£100,000 to the Government of the British Antarctic Territory to enable them to grant a similar amount to the Antarctic Heritage Trust. This grant will be used to support the trust’s work repairing and maintaining heritage sites in the British Antarctic Territory, as we prepare to mark the many forthcoming centenaries of the heroic age of exploration. Maintaining British heritage sites is part and parcel of demonstrating UK sovereignty in Antarctica.

£1 million in capital grant to the Ascension Island Government to enable them to replace the harbour crane—a critical piece of infrastructure. This grant will facilitate the restructuring of AIG’s public finances which is necessary to put them on a sustainable footing for the future.

I also plan to bring all aspects of the Government’s policies on the overseas territories together in a new White Paper in the course of the year ahead. We will want to consult widely on this. I am working with relevant Departments on a new strategy to underpin this Government’s approach to the territories. I intend to seek agreement to this strategy across Government through the National Security Council and will update the House further once this is complete.

I will inform Parliament of the outcome of discussions in the NSC in due course.

Private Military and Security Company Industry

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham): On 16 September 2010 the Foreign Secretary confirmed that the Government would be taking forward work to promote high standards in the Private Military and Security Company (PMSC) industry on three tracks: introducing robust regulation in the UK through a

10 Mar 2011 : Column 78WS

trade association based on a voluntary code of conduct agreed with and monitored by the Government; using the Government’s leverage as a key buyer of PMSC services to promote compliance with the code; and, seeking an international agreement on standards consistent with the UK code covering all aspects of PMSC organisation and operation worldwide.

Since then, we have made significant progress on the international strand. We have been leading work with the United States and Swiss Governments to develop international standards for the industry. On 9 November 2010 an international code of conduct for PMSCs was signed in Geneva by 58 major international PMSCs. This code is based on principles of human rights and international humanitarian law, and sets out broad guidelines for the organisation and operations of the industry worldwide. Since then, an additional 13 companies have signed up to the code. We are now working with the Swiss and US Governments, the PMSC industry and NGO community to establish an international mechanism to monitor compliance with the code. The Government are also now working to update its guidance for shipping companies who use PMSC services at sea, to protect their vessels against piracy.

We have also made progress to identify a representative from industry to work with us to establish a code of conduct setting out national standards derived from the international code, and to monitor and audit compliance of UK based PMSCs. We received proposals from two organisations, which we assessed in detail, and I can confirm that we will be entering further discussions with Aerospace Defence and Security (ADS) to determine next steps for ensuring the implementation of a robust code and monitoring regime in the UK.

Home Department

Worker Registration Scheme

The Minister for Immigration (Damian Green): My right hon. Friend the Home Secretary is today laying before Parliament regulations which will have the effect of closing, on 30 April 2011, the worker registration scheme for workers from those member states from eastern Europe that joined the EU on 1 May 2004. This means that after 30 April 2011 nationals of those countries will no longer be subject to a requirement to register their employment as a condition of working legally in the United Kingdom and will be able to work and reside in the United Kingdom on the same basis as nationals from other EU member states.

The worker registration scheme is being closed because the terms of the treaty of accession mean that the United Kingdom cannot apply restrictions on access to the labour market to nationals of those member states for more than seven years from the date of accession. Those other EU member states—that is, Germany and Austria—that have maintained such restrictions to date will also be required to lift them.

The Government intend to apply transitional controls on labour market access, in accordance with the relevant accession treaty, to nationals of any country joining the EU in the future. This is part of the Government’s

10 Mar 2011 : Column 79WS

commitment to reducing net migration to the tens of thousands, alongside the steps that the Government are taking to reduce immigration from outside the EU, including new limits on numbers of workers admitted under tiers 1 and 2 of the points-based system and reforms to other routes of entry including students, families and marriage. Economic migration routes will remain closed to lower-skilled migrants from outside the EU while UK and EU labour continues to be available to meet labour needs at this level.

The UK Border Agency will be publishing guidance on its website for workers from the relevant accession member states and for employers, clarifying their responsibilities in relation to compliance with the worker registration scheme until its closure on 30 April.

2012 London Olympic and Paralympic Games (Security Preparations)

The Secretary of State for the Home Department (Mrs Theresa May): The 2012 London Olympic and Paralympic games will be a once-in-a-lifetime sporting event. The Home Office and police are leading planning and operations to ensure that the games will be safe and secure—and in keeping with the wider Olympic and Paralympic culture and experience.

I am today announcing the Government’s intention to increase the maximum penalty for touting of Olympic and Paralympic tickets from £5,000 to £20,000. The change will ensure that there is a more substantial deterrent to serious and organised criminal groups, who may otherwise target Olympic tickets.

No conduct that is currently legal will be criminalised. The London 2012 Organising Committee (LOCOG) will be operating an exchange system for those who wish to sell unwanted tickets legitimately; and it also will remain possible privately to sell-on unwanted tickets at face value to family members or friends.

In addition, the Olympic and Paralympic safety and security strategy has been updated and the Home Office is publishing an unclassified version of this strategy today.

Publishing an unclassified version of the updated strategy builds on this Government’s intention to make public as much information about games safety and security as it can, without disclosing sensitive material.

The strategy has been produced in consultation with all key partners who are involved in Olympic and Paralympic safety and security planning.

Copies of this document will be placed in the House Libraries and in the Vote Office.


Restraint in Juvenile Secure Settings

The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt): Today is the publication of the “Report on implementing the Independent Review of Restraint in Juvenile Secure Settings”.

This publication is the work of the two independent monitors, Mr Andrew Williamson and Mr Peter Smallridge, who were asked to monitor the implementation of their

10 Mar 2011 : Column 80WS

original report from 2008—“Independent Review of Restraint in Juvenile Secure Settings”. I welcome their report and the conclusion that Government, secure establishments and other agencies have made good progress on implementing an ambitious programme of change in the way restraint is used in the youth secure estate.

I would like to take this opportunity to thank both Mr Williamson and Mr Smallridge for their contribution to this important area of work. Copies of their original report and the Government response from 2008 can be found on the Department’s website at: www.justice.gov.uk

Northern Ireland

Departmental Expenditure Limit (2010-11)

The Secretary of State for Northern Ireland (Mr Owen Paterson): I regret to inform the House that there were inaccuracies in my written ministerial statement printed on 14 February 2011, Official Report, column 62WS. The corrected statement now reads:

Subject to parliamentary approval of any supplementary estimate, the Northern Ireland Office (NIO) total DEL will increase by £13,685,000 from £34,158,000 to £47,843,000. Within the total DEL change, the impact on resources and capital is set out in the following table:

  Change New DEL
£'000 Voted Non-Voted Voted Non-voted Total







Admin Budget


















Total DEL






The change in resource element of DEL arises from:

A transfer of £1,543,000 from the Northern Ireland Executive in respect of the outstanding machinery of government and other budgetary changes as a result of stage 2 devolution which were not reflected in the winter supplementary estimate;

A transfer of £200,000 from the Northern Ireland Executive for preparatory costs of the 2011 elections for the Northern Ireland Assembly; and

A claim on the DEL reserve of £3,625,000 for the 2010 general election.

The change in the capital element of DEL arises from:

A transfer of £8 million from the Department of Culture, Media and Sport relating to the funding for minority language issues as part of stage 2 devolution; and

A transfer of £317,000 from the Northern Ireland Executive in respect of the remaining machinery of government and other budgetary changes as a result of stage 2 devolution which were not reflected in the winter supplementary estimate.

Subject to parliamentary approval of any supplementary estimate, the Northern Ireland Executive total DEL will increase by £175,339,000 from £10,826,546,000 to

10 Mar 2011 : Column 81WS

£11,001,885,000. Within the total DEL change, the impact on resources and capital is set out in the following table:

Change £000 New DEL £000

Resource DEL



Capital DEL



Resource DEL + Capital DEL



Less Depreciation



Total DEL net of depreciation



The change in the resource DEL arises from:

The take up of DEL end year flexibility of £96,435,000;

A transfer of £56,722,000 from capital DEL to resource DEL;

Net transfers totalling £1,543,000 to the Northern Ireland Office. These transfers are part of the outstanding budgetary changes arising from stage 2 devolution;

A claim on the DEL reserve of £67,646,000 for policing and justice;

A claim on the DEL reserve of £50,000,000 for ring-fenced student loans;

A claim on the DEL reserve of £8,200,000 in respect of Barnett consequentials arising from modernisation of DWP;

A reduction of £89,560,000 which represents the NIE share of the £6 billion reductions announced in May 2010;

A transfer of £10,000 from the Department of Energy and Climate Change for the low-carbon initiative;

A transfer of £200,000 to the Northern Ireland Office for preparatory costs of the 2011 elections for the Northern Ireland Assembly; and

An increase of £1,200,000 in respect of the change in treatment of student loans.

The change in the capital DEL arises from:

A transfer of £31,112,000 to the Department for Business, Innovation and Skills for the agreed share of the launch investment which is to be paid to Bombardier Inc and Short Brothers PLC for the C Series aircraft;

A transfer of £105,000 from the Department of Energy and Climate Change for the low-carbon initiative;

The take up of DEL end year flexibility of £120,623,000;

A claim on the DEL reserve of £12,900,000 for policing and justice;

A reduction of £38,248,000 which represents the NIE share of the £6 billion reductions announced in May 2010;

A reduction of £23,000,000 in respect of the carry forward of capital DEL to 2011-12;

A claim on the DEL reserve of £2,200,000 in respect of Barnett consequentials arising from modernisation of DWP;

A transfer of £56,722,000 from capital DEL to resource DEL; and

A transfer of £317,000 to the Northern Ireland Office. This is part of the outstanding budgetary changes arising from stage 2 devolution that were not processed in the winter supplementary estimate.

10 Mar 2011 : Column 82WS

The effect of the above changes is to increase the grant payable to the Northern Ireland Consolidated Fund by £683,000,000 to £15,253,000,000.


Renewable Energy and Fuel Quality Directives

The Parliamentary Under-Secretary of State for Transport (Norman Baker): Biofuels have an important role to play in efforts to tackle climate change, particularly where there is no viable alternative fuel on the horizon, as is the case with aviation and HGVs. In addition, they also have a role to play in promoting the security of energy supply. But we firmly believe that the potential carbon benefits of biofuels can only be realised if they are produced in a sustainable way.

My Department recognises that there are legitimate concerns about the sustainability of some biofuels. Biofuels are a continually developing technology and there is still scientific uncertainty about the sustainability of biofuels and their wider socio-economic impacts.

Much work is under way to better understand indirect sustainability effects. It is crucial that we establish strong sustainability criteria and a robust lifecycle carbon analysis to ensure first that biofuels deliver real greenhouse gas reductions and second, do not cause unacceptable environmental side effects in the process.

In particular, my Department takes the issue of indirect land use change seriously. We have recently published research on the scale of indirect land use change impacts and we are continuing to lead work on how to tackle these. The European Commission is in the process of assessing a range of options to address the issue of indirect land use change and I have written to the EU Energy, Environment and Climate Commissioners to impress on them the need for an adequate and robust solution.

Given the uncertainties, I believe it is right that this Government have taken additional time to review the subject carefully. There have been shifts in biofuels policy in the past so we need to ensure that policy decisions going forward are robust and stable, which will also give confidence to business to invest.

In addition to concerns regarding the sustainability of biofuels, we must also consider where biofuels would be best deployed across the transport sector. It may be best to focus use of what may well be limited supplies of sustainably sourced biofuel in transport modes where no other low-carbon energy source is likely to be viable.

In April 2010, my Department commissioned work to determine how best biofuels should be deployed across all transport modes. In addition, the Government tasked the Committee on Climate Change to review the level of ambition for renewable energy. These pieces of work are due to conclude over the coming months. The evidence we gather about the best use of biofuels across modes will inform our view of likely levels of uptake.

Given that biofuels policy has wide implications, I will continue to engage with ministerial colleagues across Whitehall to ensure that Government policy on biofuels is aligned going forward.

Today, I am publishing separate consultations on proposals to implement the European renewable energy and fuel quality directives. Both of these directives contain requirements related to the use of biofuels.

10 Mar 2011 : Column 83WS

The renewable energy directive requires the UK, by 2020, to source 15% of its overall energy, and 10% of energy used in transport, from renewable sources. The related fuel quality directive requires fuel and energy suppliers (principally those providing fuel and energy for land-based transport) to reduce the lifecycle greenhouse gas emissions of the fuel/energy that they supply by 6% per unit of energy by 2020.

Given the need to consider our developing evidence base, I do not propose to make any changes to the current biofuel supply trajectory that is set out in the Renewable Transport Fuel Obligations Order 2007. However, there will be a legal obligation on the Secretary of State to keep this issue under review and to consider what additional measures will be required to ensure that the UK delivers the requirements of the EU renewable energy and fuel quality directives in the period 2014 to 2020. This approach should enable us to establish a stable biofuel policy that will allow industry to robustly plan for the period 2014 to 2020.

10 Mar 2011 : Column 84WS

The two consultation documents set out proposals to implement the transport requirements of the renewable energy directive through amendment of the UK’s renewable transport fuel obligation (RTFO) and proposals to implement the fuel quality directive through the amended RTFO and the proposed motor fuel greenhouse gas saving regulations. Our implementation proposals involve making new provisions for biofuels to meet the EU biofuel sustainability criteria and introducing double certification for biofuels produced from wastes (such as used cooking oil) and other feedstocks that do not compete with food production or contribute to indirect land use change. In addition, we propose to put in place a 6% lifecycle greenhouse gas reduction obligation for 2020 and introduce requirements for the relevant fuel/energy suppliers to report on the lifecycle greenhouse gas performance of their fuels in the meantime.

The consultation period will run from today until 2 June and we aim to introduce and bring into force the relevant legislation completing the implementation of the transport elements of both directives by the end of this year.