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We believe that the RTFO will significantly reduce emissions of carbon dioxide from road transport. I have no doubt that that is why noble Lords who

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support it, even with qualifications, do so. By requiring road transport fuel suppliers to supply a certain amount of biofuel each year, the order is due to save between 7,000 and 8,000 tonnes of carbon a year by 2010. That is a significant contribution to carbon reduction, and it contributes to the Department for Transport’s overall strategic objective of improving the environmental performance of transport.

The RTFO will come into force the day after being made, and will bring the obligation into force from 15 April 2008. The obligation will be assessed over one year. The timing is set to coincide with the requirements of the fuel duty system, to which it has been closely linked to minimise the costs to obligated suppliers and the Government.

The order provides for the administrator to issue certificates as evidence of the supply of renewable fuel, and they can, in turn, be used by a supplier as evidence of meeting its obligation. The certificates are issued in electronic form as a credit to an account maintained by the administrator and may be traded among anyone who has an account with the administrator.

The order provides for those suppliers who have not been able to produce sufficient certificates to meet the remainder of their obligation by paying what noble Lords accurately described as a buyout sum. The buyout price will be 15p in the first two years, and this will be multiplied by the number of litres of fuel by which the supplier has fallen short in order to produce the buyout sum. The buyout price is linked to the duty derogation for bioethanol, which is expected to remain at 20p for the first two years. I heard what noble Lords said about the need for stability in the market. Clearly, that is a consideration and we need to keep both those sums in mind, because one acts as a carrot and the other as a stick.

Thereafter, the amount of the buyout price will vary, depending on the amount of the duty derogation for bioethanol. If the duty derogation is reduced, the buyout price increases. However, for the year beginning 15 April 2010 onwards, the buyout price and the duty derogation will be 30p per litre. The Government have indicated that they expect the RTFO to replace the duty derogation as the support mechanism for biofuels, but the timing and amount of any changes are for future decisions of the Chancellor of the Exchequer. The buyout price, together with the duty derogation, should provide an economic incentive for fossil fuel suppliers to supply biofuels, as it should exceed the additional cost of supplying biofuels.

The order provides that any funds received in buyout payments are recycled to suppliers. Each certificate will be eligible for an equal share of the recycle fund, provided that it has been either presented by a fuel supplier as evidence of meeting the obligation or, in reverse, surrendered by a fuel supplier for the purpose of receiving a share of the recycle fund.

The order also provides for civil penalties in the event of a breach of the order, the revocation of certificates in the event of issue on the basis of information subsequently found to be erroneous or fraudulent, and other matters relating to the duties of the

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administrator and the proper operation of the scheme. It also includes a schedule on the composition and functioning of the administrator. Legal and political issues prevented the Government appointing an existing body as the administrator in accordance with the recommendations of the Hampton review of regulation. However, officials have done their best to ensure that other Hampton principles have been fully reflected in the design of the scheme and the organisation of the administrator. That has to include establishing a risk-based framework for inspection, an absence of paper forms and an emphasis on the provision of advice to suppliers.

I want to try to address some of the other points made during the debate and to tackle head-on some of the criticisms of biofuels in general and the RTFO in particular. The noble Lord, Lord Hanningfield, referred to the sustainability of biofuels—a point echoed by the noble Viscount, Lord Eccles. As I acknowledged earlier, it is a concern in the UK and elsewhere. Critics argue that biofuels deliver virtually no carbon savings and cause irreparable damage to the wider environment, as well as forcing up the price of food.

It is certainly true that there are good and bad biofuels, and the Government have consistently highlighted the need for international sustainability standards for biofuels. However, as experience has shown in other fields, these things take time to develop. As a first step, we have developed a sophisticated but robust reporting mechanism to encourage transport fuel suppliers to source only the best biofuels. We have developed this in partnership with stakeholders from the oil and biofuel industries and from environmental and social NGOs. I think it is fair to say that we are rather proud of what we have achieved so far, and we are confident that the reporting mechanism will create a powerful incentive for transport fuel suppliers to focus on the sustainability of their biofuels.

9 pm

Secondly, there is increasing concern at the high costs of biofuels. Critics argue that we should support other things instead. The noble Lord, Lord Bradshaw, made the point that we should seek to improve the fuel efficiency of vehicles and invest more in public transport. Obviously, those are important issues. We recognise the value of investing in public transport, which we have certainly done. As a Government, we do all that we can to encourage greater fuel efficiency and more efficient use of energy in society generally. The noble Lord, Lord Palmer, made the point that there are variations in biofuel costs and he said that the market is rather different in the United States.

We have never claimed that biofuels are a cheap way of saving carbon. Nor have we argued that biofuels are, in themselves, a complete solution to the problem of climate change. But if we are ever to get to “tomorrow’s biofuels”, I argue that we have to do all that we can now to start towards that new tomorrow. We have the potential to deliver, in the future, much higher carbon savings at lower costs. To do that, we need to start creating a market for them today. The RTFO will do just that without requiring changes to today’s vehicles, without requiring drivers to change

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their behaviour and without the need for a whole new forecourt infrastructure. The industry is gearing up to meet the obligation and the RTFO could start to reduce carbon emissions, in a concrete form, from next April. That is our objective.

On the concern raised about suppliers buying out rather than supplying biofuels, the Government strongly believe that that will not be the general case, unless there is a significant and totally unexpected change in commodity prices. The major fuel suppliers are investing in the infrastructure needed to deliver the biofuels and have indicated that they expect to meet the obligation with little recourse to buying out. With just the duty incentive in place, biofuel sales have risen to 1 per cent of total fuel sales and the Government firmly believe that the buyout penalty provides sufficient additional incentive for suppliers to reach the obligation amounts. The buyout price will be kept under review to ensure that, in the future, the incentive to supply rather than to buy out remains.

The RTFO has been designed to minimise the number of obligated suppliers and, as far as possible, to minimise the administrative burden on them. We expect that only very large companies will be obligated and the draft order includes a de minimis threshold to avoid obligating small fossil fuel importers. Furthermore, the Government will recommend to the administrator to minimise, so far as possible, reporting requirements for small biofuel suppliers. Fuels that are already eligible for the duty derogation will be eligible for renewable transport fuel certificates, enabling small producers of biofuel to participate in the scheme.

The RTFO will create a market for approximately 2.5 billion litres of renewable fuel per annum in the United Kingdom. British farmers will have every opportunity to compete to supply the feedstocks to meet that demand, as UK-based biofuel producers bring new production capacity online in the coming years.

I hope that noble Lords find those points to be of interest and that they satisfy some of the issues raised in the debate. I shall work through some of the other issues as quickly as I can. The noble Lord, Lord Hanningfield, raised the conundrum of corn for fuel versus food when people are starving, as mentioned in the report by the UN rapporteur. As I think I have made clear in the past, not all biofuels are from food crops. Jatropha, which is inedible, is a good example of one that is not. There are many global factors affecting crop prices, of course, including the Australian drought, the Chinese food demand and, indeed, biofuels. Currently, the UK has surplus production of wheat, so there is capacity within the UK market. We believe that the market will respond and that increased prices are already leading to an increasing level of supply. Ultimately, crop prices are only a small part of food pricing; the cost of labour and production will obviously have an impact. The new body will monitor the impact on other sectors, and there is of course the reporting obligation to which I referred earlier.

The noble Lord, Lord Hanningfield, raised some other issues that merit a response this evening. He cast doubt on whether there could be an achievement

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of growth in volumes. The price of biodiesel ensures that it is still economic in terms of UK fuel prices. The industry is confident of delivery. I am delighted to hear that the noble Lord has started visiting plants—I certainly intend to make some visits myself—and that the feasibility study confirmed availability of sustainable biofuels up to 5 per cent. The noble Lord also made a point about the 20 pence tax break needing to continue past 2009, which was echoed by others. We have guaranteed the 20 pence incentive until spring 2010. As I said, thereafter it must be a matter for the Chancellor to review.

I have responded in part to the issue of making cars more fuel efficient and taking other remediation measures on CO2 emissions. The Government have never said that biofuels are the only thing required to reduce CO2 emissions. There must be consideration of that in a wider package of measures. Of course, many of those measures have been set out in the energy White Paper, aimed at reducing carbon emissions from the transportation sector.

The noble Lord, Lord Palmer, raised a question about the obligation being kept under review and encouraged us to ensure that the quantity of biofuel rises, as it is doing in the USA. We have said that the level of RTFO should increase, but only if a number of conditions are met: certainty that the biofuels are sustainable, on which I seem to hear support from all over your Lordships’ House; the resolution of a number of technical and infrastructure issues, which is key to RTFO increasing; and ensuring that the costs to consumers are reasonable and acceptable within the market.

The noble Lord, Lord Bradshaw, made a point about promoting electric vehicles and greater energy efficiency. I cannot disagree with those points; they are given goods. It is important to encourage use of the right sort of biofuels—as I said, there are good and bad—including those produced from non-food crops. We all want to see the second-generation biomass, but we need to get there. We argue that we must make a start with the first-generation biofuels. I have said several times that we cannot solve all our problems through biofuels, but it is an important part of the picture.

I have covered most of the points raised, with the exception of that on tallow. The noble Lord, Lord Bilston, kindly gave me advance knowledge of his question. In response, I see and understand entirely the noble Lord’s concerns, but we must look at this as part of a broader picture. We will—I give this commitment—ask the Renewable Fuels Agency to monitor the impact of the RTFO on other sectors; I made that point earlier. In particular, we will ask the Renewable Fuels Agency to devote considerable thought and scrutiny to its potential impact on the tallow industry, which I recognise is of considerable value and could have some impact on certain parts of our economy. The Renewable Fuels Agency certainly has an obligation to publish regular reports on these issues, so we will be able to take them fully on board when they arise.



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I had two further points from the noble Viscount, Lord Eccles, who mentioned appeals procedures. The appeals procedure is set out in the Energy Act 2004, so it would not be appropriate to repeat it in the draft order. The noble Viscount also asked about the department assessing the sustainability of biofuel feedstocks, in particular palm oil. We have developed a comprehensive programme looking at sustainability and a reporting mechanism is to be put in place in partnership with stakeholders, including the relevant government departments, the industry and NGOs. We are getting good advice on the mechanism for making an assessment of sustainability, which is not easy, and we think that our model for measuring sustainability will be robust.

I doubt that I have answered all the points raised to everyone’s satisfaction, but I have tried to cover as much ground as I can. If I have missed things, I apologise to the House and to the noble Lords who raised them. This debate does not stop here and I have no doubt that it will continue. I am grateful to all noble Lords who have contributed to this evening’s discussion.

On Question, Motion agreed to.

Zimbabwe: Public Servants

9.10 pm

Lord Waddington asked Her Majesty’s Government whether they will assist those who served the Crown in Southern Rhodesia before the unilateral declaration of independence, and in many cases afterwards, for whose pensions the Government of Zimbabwe took responsibility under the independence constitution but who are no longer receiving any pension.

The noble Lord said: My Lords, I am grateful to the Minister for coming to the House at this hour to reply to this short debate. He will know that I have raised this matter on a number of occasions. Every time I have raised it, I have been treated with the utmost courtesy by the Ministers who have replied—I have no complaint about that—but the Foreign Office has got itself stuck in an entirely untenable position. It has been defending a case that lacks all moral integrity, and I have confidence that a new Minister with great experience and a reputation for finding his way through thickets of obscurantism will go back to officials and tell them that they have fought manfully over the years, but now is the time for them to abandon their crumbling earthworks, recognise the facts and do what is obviously right.

I must declare an interest: I am president of the Overseas Service Pensioners Association, which seeks to represent the interests of those who worked overseas in our colonies as Crown servants. I am speaking tonight because my members are in despair at the refusal of Her Majesty’s Government to lift a finger to help Crown servants who held office in Southern Rhodesia, some of them staying on after the birth of Zimbabwe, but who have been robbed by Mugabe of the pensions guaranteed to them under the independence constitution of 1980.



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Let me be clear: Britain has taken over responsibility for the payment of pensions to people who served in other colonies under the powers given by the Overseas Pensions Act 1973, but the British Government say to those I represent, “Bad luck. When you picked Southern Rhodesia, you picked the wrong colony, old boy, and you, unlike those who served elsewhere, must survive on social security and charity”. That is something that I do not think any of us here should be prepared to put up with.

I can comfort the Government with this thought: to give help to these people will not exactly break the bank. In 1997, there were living in Britain 800 people who were recruited through Rhodesia House in London to serve in Southern Rhodesia and the annual cost of the pensions payable to them was put at £6.9 million. Now the number of those pensioners has dwindled to 350 and paying them that to which they are entitled would, we estimate, cost about £4.5 million. We arrived at that figure after taking account of the decline in numbers and the 35 per cent in the RPI since 1997.

To put this into perspective, I should say that last year DfID paid out £113 million to pensioners who served in other colonies, but to look after my people would not increase DfID’s bill even by £4.5 million because the bill for the other pensioners is declining at the rate of £2 million per year because of deaths. So it looks as though it will only have to find another £2 million a year to do justice by my pensioners. That sum, of course, would decline rapidly as the number of my pensioners fell also as a result of deaths.

I will just give a few facts. Back in 1979 legality was restored in Southern Rhodesia, and only after that was independence granted to Zimbabwe. It is difficult to find anyone who thinks that the Government did not adopt the right course at that time. The fact remains that it was not the archangel Gabriel who granted independence to Zimbabwe—it was the British Government. What has happened since to those who worked in Southern Rhodesia as servants of the Crown, and in particular what has happened to their pensions, has happened as a direct result of Zimbabwe becoming independent and of the terms under which it was granted independence. How on earth in those circumstances can the Government say that what has happened to the pensions is nothing to do with them? That is completely ridiculous.

What is so different about our pensioners which makes them so unworthy of consideration when other former Crown servants have their pensions paid by Her Majesty’s Government? Some of the arguments advanced may have some legal validity, but none of them has anything whatever to do with fairness or morality.

First, it is said that if anything were done it would have to be done for all Rhodesian public service pensioners—all public servants, including those who worked for the power corporation, the railways, universities and local government. That is complete nonsense. Paragraphs 112 and 113 of the Zimbabwe independence constitution specifically provide for the protection of the pension rights of public officers, and “public officers” are defined as persons holding a paid office in the

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service of the state. In other words, the British Government decided that Crown servants had pension rights deserving of protection. The British Government insisted on their rights being safeguarded in the constitution when the rights of other pensioners were not.

Secondly, it is said that if the Government accept responsibility for my pensioners, they would have to accept responsibility for everyone who worked in the public service in Rhodesia, whether or not they were recruited in Britain before they took up their appointment and whether or not they returned to Britain after completing their service and are living here now. Again, that is nonsense. Surely any fair-minded person would concede that the Government have at least a moral responsibility towards those recruited in Britain to go and serve the Crown overseas and who returned to Britain after completing their service—an obligation quite different from any responsibility they might have to someone native to the territory or who came to Southern Rhodesia from elsewhere and chose to work in the public service rather than, say, in a factory or on a farm.

Next it is said—I find this almost the most objectionable of all the arguments—that although Britain has accepted responsibility for the payment of pensions to those who have worked as Crown servants in other colonies, Southern Rhodesia was not like other colonies; it was a self-governing colony. It was enough of a colony for Britain to refuse to accept UDI as a legal act, and of course from December 1979 until independence in April 1980 it was far from self-governing—it had a British governor, Lord Soames, who was, in the words of the relevant Order in Council,

“Ah,” say our Government, still wriggling. “These Crown servants who worked in Southern Rhodesia were not recruited and appointed by the British Secretary of State. They were recruited by Rhodesia House”—admittedly, of course, with the knowledge and apparent approval of the Secretary of State. That, say our wriggling Government, makes them—wait for it—“local employees, like many thousands of former local employees in other colonial public services”. There is only one word for that—baloney. My people were recruited here on expatriate terms broadly similar to those of colonial service officers in other dependent territories. Their passage out to the territory was paid, they took their leave entitlement back here, and at the end of their service they retired here. Local employees, my foot. They were Crown servants appointed with our Government’s knowledge and approval to work in a British colony.

When other colonies became independent, colonial officers had their position protected by specific public office agreements, and clearly in retrospect it would have been better, and would have left the Government with less room to try and evade their responsibilities, if there had been a POA in the Rhodesia case; but whose fault is it that there was not a POA? It was the Government’s fault—the Government saying at the time that the absence of a

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POA should not give anyone cause for concern, one not being really necessary because in the words of the then Minister:

For the Government to rely now on the absence of a POA is like a defendant in a criminal case asking the court to take note of and rely on his own self-serving statement.

Ministers have often claimed that, because of our colonial past, it is very difficult for them to do much to help the victims of Mugabe. But there are some people who are part of that colonial past who the Government can help—British people who went out to a British colony as servants of the Crown and have suffered terrible loss following the decision by Britain to hand over responsibility for these people’s pensions to Zimbabwe. I beg the Minister to go back to officials in the Foreign Office and tell them that their attitude is quite unacceptable. If the Government are not now prepared to do their duty and make some realistic payment to my people, I will go on about this as long as I have breath in my body and as long as a single one of these pensioners remains alive.


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