PARLIAMENTARY DEBATES

HOUSE OF COMMONS

OFFICIAL REPORT

Third Standing Committee on Statutory Instruments, &c.

DRAFT TRAVELLERS' RELIEFS (FUEL AND LUBRICANTS) ORDER 1995

Wednesday 18 October 1995

LONDON: HMSO

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The Committee consisted of the following Members:

Chairman: Mrs. Ann Winterton

Bruce, Mr. Malcolm (Gordon)

Gale, Mr. Roger (Thanet, North)

Gill, Mr. Christopher (Ludlow)

Goodson-Wickes, Dr. Charles (Wimbledon)

Hawksley, Mr. Warren (Halesowen and Stourbridge)

Heathcoat-Amory, Mr. David (Paymaster General)

Jessel, Mr. Toby (Twickenham)

Madel, Sir David (Bedfordshire, South West)

Nicholson, Emma (Torridge and Devon, West)

Primarolo, Ms. Dawn (Bristol, South)

Purchase, Mr. Ken (Wolverhampton, North East)

Randall, Mr. Stuart (Kingston upon Hull, West)

Rooney, Mr. Terry (Bradford, North)

Rowe, Mr. Andrew (Mid Kent)

Simpson, Mr. Alan (Nottingham, South)

Squire, Ms. Rachel (Dunfermline, West)

Touhig, Mr. Don (Islwyn)

Willetts, Mr. David (Lord Commissioner to the Treasury)

Mr. M. Hennessy, Committee Clerk

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3 Third Standing Committee on Statutory Instruments, &c. Wednesday 18 October 1995

[MRS. ANN WINTERTON in the Chair]

Draft Travellers' Reliefs (Fuel and Lubricants) Order 1995

4.39 pm

The Paymaster General (Mr. David Heathcoat-Amory): I beg to move, That the Committee has considered the draft Travellers' Reliefs (Fuel and Lubricants) Order 1995. I welcome you to the Chair, Mrs. Winterton. The Travellers' Reliefs (Fuel and Lubricants) Order 1995 will always be associated with your name, for you have saved it. If the Committee had been unable to find you as our replacement Chairman, we might have run out of parliamentary time in which to endorse the order.

4.40 pm

Ms Dawn Primarolo (Bristol, South): On the face of it, there is no reason to argue against the statutory instrument, so I shall not do so. However, I should like to know why the Government did not take action on this issue before. The Paymaster General admitted in his letter of 20 July that there had been a gap in United Kingdom law for some years to the effect that it was not an offence for agricultural diesel to be taken into Northern Ireland from the Republic of Ireland for use in road vehicles. Could the Government really take no action to change the United Kingdom law until the European Union excise simplification directive had been agreed and supported by clarification from the European Commissioners? If so, will the Paymaster General tell us when that directive was agreed to? Unless, it was in the early summer of 1995, this change to the law could have been made before now by being included in the Finance Bill. I hope that the Paymaster General will clarify that point. We welcome the provision.

4.41 pm

Mr. Christopher Gill (Ludlow): I should like clarification from the Paymaster General on two points. First, is it the practice of Customs and Excise to levy duty on fuel on the vehicles listed in the statutory instrument? Secondly, have other European nations implemented corresponding legislation?

4.42 pm

Mr. Heathcoat-Amory: To explain the background of why the measure is necessary and important I should remind the Committee that diesel fuel is used in several different ways. As a road fuel it is subject to high taxation, but when used for agricultural and heating purposes it is subject to a low duty, or even no duty at all. It is often dyed and has a marker chemical added to it when it bears a low duty. For the edification of the Committee, I have with me 4 some samples of normal diesel, so-called red diesel, which will be familiar to those who visit farms, and green diesel, which is used in the Irish Republic and is the equivalent of our red diesel. A problem has arisen recently because legislation which has been on the statute book for several years provides relief from excise duty on fuel contained in the tanks of vehicles at importation and does not restrict that relief to fuel originally released for road use. Therefore, green diesel from the Irish Republic designed for heating and agricultural use could be used legally for transport purposes in the United Kingdom. With the advent of the single market and the peace process in North Ireland, that situation regrettably opened up an avenue for smuggling and duty evasion in Ireland. As soon as that became apparent we took action. The order was tabled from 1st August. I am glad to say that it has substantially solved the problem. I have a letter from the Road Haulage Association Ltd, dated 12 October saying that the order has already been successful in stopping the illegal use of green diesel, without, of course, undermining legitimate trade in Ulster. I hope that the hon. Member for Bristol, South (Ms Primarolo) agrees that we took action as soon as the problem became apparent. No action was taken in earlier years because no problem existed. My hon. Friend the Member for Ludlow (Mr. Gill) asked whether other member states have similar provisions. They do. They do. He also asked whether duty was levied by customs on vehicles listed in the statutory instruments. The answer is only if it is not relieved under the terms of the order. The description of vehicles in the order is self-explanatory. It covers all commercial vehicles but not private vehicles which, if necessary, may be dealt with in primary legislation.

Mr. Toby Jessel (Twickenham): Will my hon. Friend clarify the reason for the 28-day delay? When Budgets were introduced as late as March, changes in petrol excise duty came into being the same night, often at midnight or 10 pm. If we decide on a 28-day delay, surely a great deal of cheap diesel will be flogged in Northern Ireland in the period before the door closes? Why cannot it be done more quickly?

Mr. Heathcoat-Amery: I think that my hon. Friend has misunderstood what I said—I may have expressed myself badly. We acted as soon as we could. The order came into effect on 1 August, but the House must approve the original order by resolution within 28 days for that order to take effect. If the period of 28 days were to expire before the order was approved, it would cease to have effect. This is why it was important for the Committee to sit within 28 days and, of greater importance, that the Committee had a Chairman.

Question put and agreed to.

Resolved, That the Committee has considered the draft Travellers' Reliefs (Fuel and Lubricants) Order 1995.

Committee rose at thirteen minutes to Five o'clock.

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THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:

Winterton, Mrs. Ann (Chairman)

Gale, Mr.

Gill, Mr.

Goodson-Wickes, Dr.

Hawksley, Mr.

Heathcoat-Amory, Mr.

Jessel, Mr.

Primarolo, Ms.

Purchase, Mr.

Rowe, Mr.

Touhig, Mr.

Willetts, Mr.

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