Rebated Fuel Rules: Construction Industry

Debate between Helen Whately and Dave Doogan

Wednesday 19th January 2022 Westminster Hall

[Helen Whately]

As we have heard from those who are trying to develop alternatives, one of the barriers to developing those alternatives—one of the things that reduces the incentives to do so—is the relatively low cost of red diesel. It is only by addressing the fact that there is such a low tax rate on red diesel that we incentivise the development of alternatives—and we are seeing the development of alternatives.

[Dave Doogan]

Will the Minister give way?

[Helen Whately]

I will make some more progress. JCB developing its hydrogen-fuelled digger is one example, and Volvo is another example. So we are seeing the development of alternatives. This proposal is a really important part of ensuring that the incentives are there for these things to happen.

I will pick up on a few other points that hon. Members have made. The hon. Member for Upper Bann talked about the impact of covid on the construction sector. I heard the phrase “a perfect storm” from the right hon. Member for Orkney and Shetland (Mr Carmichael). I will say a couple of things. First, we looked at the cost implications, and that is why there have been some exemptions in very specific areas where we thought the taxation change might have a material impact on household costs. However, for the areas where the change is being introduced, the Government do not believe there is a material change in the ultimate prices to households. The cost of fuel is relatively small for most businesses—I recognise that that is not the case for all businesses.

The other issue, in the context of covid, and taking a step back, is that we have put in a £400 billion package of support for the economy throughout this pandemic. We have already provided £250 million to local authorities in England and recently provided an extra £100 million that local authorities will distribute to businesses affected by covid to support them through the difficult times that we recognise they are going through. The Barnett equivalents of those amounts will go to the devolved nations. So we are giving a huge amount of support to businesses throughout this pandemic—we are absolutely mindful of that. Given that that support is in place, that particular issue is not a reason not to continue with the very important commitments that we have made—and that other parties have supported—to transition to a greener economy.

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[Helen Whately]

That is not a figure that I have seen, but I can double-check that. I was asked specifically whether there has been an economic impact assessment. We consulted on the proposal and assessed the expected impact. As usual, a tax information and impact note was produced and published, as hon. Members would expect.

For those who said that the change will not make a difference to the environment, or will backfire, as I mentioned it is about incentivising the development of alternatives. Alternatives are already being developed. Specifically to support that, the Government have doubled the funding for energy innovation through the £1 billion net zero innovation portfolio. The Department for Business, Energy and Industrial Strategy recently announced £40 million of funding for the red diesel replacement competition, which is part of that portfolio, to specifically grant funding to projects that will develop and demonstrate lower-carbon, lower-cost alternatives to red diesel for the construction and mining and quarrying sectors.

[Dave Doogan]

Will the Minister give way?

Oral Answers to Questions

Debate between Helen Whately and Dave Doogan

Tuesday 8th June 2021 Commons Chamber

[Helen Whately]

I welcome the hon. Member’s support for and interest in social care reform, along with others across the House. We know that social care reform is needed. We have rightly over the last year focused on supporting social care through the pandemic, getting £1.8 billion of extra funding for social care to the frontline and providing billions of items of PPE, over 100 million tests to social care and the vaccination programme to care home residents, those who receive social care and the workforce. We are working on our social care reforms and will bring those forward later this year.

[Dave Doogan]

Many in this place and across England will be asking, “Where is England’s long-awaited social care Bill?” because they will have seen that the SNP Government are delivering a new deal for the social care sector in Scotland, building a new national care service that will improve workers’ conditions and standards of care, and increasing investment in care by 25%. Will the UK Government follow Scotland’s lead in transforming social care, and will the Minister contact Scottish Government Ministers to learn from our over a decade-long experience of integrating health and social care?