Finance Bill — Climate Change Levy — 2 May 2000

Question agreed to.

Clause 1 ordered to stand part of the Bill.

Clause 12 ordered stand part of the Bill.

Question proposed , That the clause stand part of the Bill.

So far, all of these proposals have been rejected with little explanation.

The treatment of CHP under the Levy is causing grave concern both, among CHP developers and wider industry which seeks to utilise it . . . CHP has not yet been granted the fair access to this market that it was promised by Ministers.

despite Government assurances that the

would not apply to CHP, it is now clear that it will apply to electricity sales made to licensed suppliers and subsequently sold on to business consumers.

this application of the CCL . . . will make further commercial investment in large projects to install new technology CHP uneconomic.

decided to defer our decision to proceed with investment for replacement CHP at our York and . . . (Norfolk) sites for which we already have Section 36 consents. We will also defer further feasibility studies.

We deeply regret this outcome, as we firmly believe in the contribution that CHP can make to the reduction in CO 2 emissions.

We are concerned that a sizeable proportion of EEF member companies will be substantial net 'losers' under the levy/NI rebate system. This will cause many UK engineering and manufacturing companies to become uncompetitive in international markets.

The Government recognises the case for giving special treatment to energy intensive sectors because of their high energy costs and their exposure to international competition.

We are deeply concerned about the effect on the international competitiveness of British companies as a result of these proposals.

The Levy means LPG users paying an extra £5m/yr for the privilege of using

It cannot yet be known whether the amount raised from CCL and the amount to be handed back will be equal. Indeed it looks as though the amount to be raised will be considerably in excess, so it is not surprising that so many businesses are complaining that they will be net losers. In addition . . . there would be a redistribution between firms that was largely arbitrary, depending not only upon the amount and type of their energy consumption, but also on the structure of their wage bill.

must keep dead-weight compliance costs to a minimum.

Energy tax would have to be set at a politically unacceptable level in order to produce the required reduction in emissions

We do not believe that the Climate Change Levy meets the tests of good taxation. The system of exemptions, negotiated agreements and reduced rates has produced an extremely complex and cumbersome market instrument which will result in a relatively modest emissions reduction.

The report also suggests that small and medium-sized enterprises will experience deep problems because the way in which the scheme is devised means that it will concentrate on larger enterprises that can make pooling arrangements to negotiate deals. We ignore that Select Committee evidence at our peril.

deep concern about the Government's proposals for the climate change levy. We note that the textile industry has been excluded from the list of industries that will receive a rebate on this levy.

I enclose a report from our energy consultants which indicates that this levy will costs Don & Low an additional £197,390 per annum on our electricity.

As a company that prides itself on its energy conservation programme, we find this hard to swallow. We trade in very competitive markets mainly in Europe and are being significantly disadvantaged through the strength of the pound and the cost of transport to our key markets.

probably is a role for a tax if businesses of all sizes and from all sectors are to contribute to improved energy efficiency and help meet the UK's emissions targets.

Question put, That the clause stand part of the Bill:--

The Committee divided: Ayes 309, Noes 122.

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