Oral Answers to Questions

Gareth Davies Excerpts

Tuesday 19th December 2023 Commons Chamber

[Cat Smith (Lancaster and Fleetwood) (Lab)]

1. If he will make an assessment of the potential merits of introducing landfill tax relief for local authorities who are responsible for hazardous waste after companies go into liquidation.

[The Exchequer Secretary to the Treasury (Gareth Davies)]

A very merry Christmas to you and your staff, Mr Speaker. Landfill tax provides an economic incentive to manage waste more sustainably, which has contributed to a 90% reduction in local authority waste sent to landfill in England since 2000. However, it was not intended to act as a barrier to the remediation and redevelopment of contaminated land. In the autumn statement the Government announced the land remediation pathfinder fund, which will provide £78 million of targeted support to local and mayoral authorities.

[Cat Smith]

Happy Christmas, Mr Speaker. For two weeks now the old Supa Skips site in Lancaster has been burning, and it looks as if Lancaster City Council will be left to pick up the tab for the clean-up. Some of that money has to be spent on landfill tax. Will the Minister meet me and Lancaster City Council to discuss what options are open to my local council to ensure that local ratepayers are not left footing the bill for rogue companies that walk away from sites, such as Supa Skips?

[Gareth Davies]

As I mentioned in my previous answer, the landfill tax has been hugely successful but it was never intended to act as a barrier to remediation. The fund that was announced in the autumn statement will be open for bids in early 2024, and I encourage the hon. Lady’s local authority to apply through the normal way. Secondly, there is an ongoing review into the landfill tax, and reform of current exemptions are within scope of that review. Our belief is that the fund may offer more targeted support in the way that she desires.

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[Jack Brereton (Stoke-on-Trent South) (Con)]

17. What steps his Department is taking to help increase the level of business investment.

[The Exchequer Secretary to the Treasury (Gareth Davies)]

In the autumn statement, the Chancellor announced an ambitious growth package that will boost business investment by making full expensing permanent, by removing barriers to business investment, by reforming our inefficient planning system, by speeding up electricity grid connection times and by making £4.5 billion available for strategic manufacturing sectors over the next five years, among other measures.

[Jack Brereton]

I thank the Minister for that response. It is very welcome to see full expensing, which will help businesses to invest in the plant and machinery and the technology that are needed. It would also help the ceramics sector, in particular, if it were exempted from the emissions trading scheme. Will my hon. Friend speak to the Chancellor about the possibility of exempting the ceramics sector from the ETS, which would help to give the sector the breathing space to invest in productivity and energy efficiency gains?

[Gareth Davies]

I can think of few greater champions for Stoke’s ceramics sector than my hon. Friend. We recognise that carbon leakage is a significant risk for the ceramics sector, so I can offer him two pieces of information. First, we provide free allowances to the ceramics sector under the ETS. Secondly, just yesterday we announced that ceramics will be included in the UK’s carbon border adjustment mechanism.

[John Penrose (Weston-super-Mare) (Con)]

18. If he will make an estimate of the potential impact of a carbon border adjustment mechanism in the form recommended by the Commission for Carbon Competitiveness on fuel duty.

[The Exchequer Secretary to the Treasury (Gareth Davies)]

The Government have announced that they will implement a CBAM from January 2027. The UK CBAM will place a carbon price on some of the most emissions-intensive industrial goods imported to the UK and will ensure that the UK’s decarbonisation efforts lead to a true reduction in global emissions, rather than simply displacing carbon emissions overseas. The delivery of a CBAM will be the subject of further consultation in 2024.

[John Penrose]

I congratulate the Minister. A CBAM is the cheapest and most future-proof way to save the planet and UK manufacturing jobs at the same time, but some of the details look troubling. Why have some manufacturing industries been left out entirely? Why are others arriving late, so they will be vulnerable to dumping? And how will he ensure that this is not just a tax and price rise for already hard-pressed families and businesses?

[Gareth Davies]

I recognise and thank my hon. Friend for his work as chair of the Commission for Carbon Competitiveness. I will directly address his two main questions. On speed, implementation by 2027, at the latest, will allow the Government to engage with businesses to ensure that they are well prepared, but next year’s consultation will provide more information on timings. We have identified eight sectors that have the greatest exposure to carbon leakage, from both a trade and an emissions perspective.

[Nigel Mills (Amber Valley) (Con)]

20. What progress he has made on the introduction of investment zones.

[The Exchequer Secretary to the Treasury (Gareth Davies)]

Since the spring Budget, the Government have announced seven of the eight English investment zones and confirmed the location of four places eligible to host investment zones in Scotland and Wales. The Government are committed to ensuring that funding and tax sites go live in the 2024-25 financial year.

[Nigel Mills]

I welcome the investment zone in Nottinghamshire and Derbyshire. Will the Minister confirm that some of the benefits of these zones are not only available in the small number of large sites but are available to any business across the whole zone to apply for?

[Gareth Davies]

My hon. Friend is right to recognise the east midlands investment zone, which will bring significant benefits across the region in the advanced manufacturing and green industry sectors. I am pleased to tell him that it started with a £9.3 million anchor investment and, over time, will leverage some £323 million in private investment, supporting 4,000 jobs overall.

[Theresa Villiers (Chipping Barnet) (Con)]

21. What steps he is taking to reduce inflation.

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[Jim Shannon (Strangford) (DUP)]

The life sciences sector is worth £2.4 billion to the Northern Ireland economy. What steps have been taken, with counterparts in the Northern Ireland Assembly, to increase funding for employment within this worthy sector?

[The Exchequer Secretary to the Treasury (Gareth Davies)]

The hon. Gentleman is quite right that life sciences is one of the key growth industries for this country. I would be happy to meet him to discuss all the things we are doing for the sector, particularly in Northern Ireland.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

Our economy continues to be impacted by the war in Ukraine and denial across the Black sea, and we now must brace ourselves for further economic shocks as global shipping avoids the Red sea. Does the Minister agree that we should be protecting these shipping lanes? Our Navy is now too small by half to protect our maritime interests, so will he now look at investing in our surface fleet to protect our economy?