§ Mr. Jim CunninghamTo ask the Chancellor of the Exchequer what estimate he has made of how much the Treasury will receive annually as a result of the climate change levy; and if the levy will be fiscally neutral within the manufacturing sector. [89568]
§ Ms HewittThe climate change levy will be introduced in April 2001 raising around £1.75 billion in its first full year. Its introduction will entail no increase in the overall burden of tax on business as the revenue will be fully recycled via a 0.5 percentage point cut in the main rate of employers' National Insurance Contributions. Business will also benefit from an additional £50 million for schemes aimed at promoting energy efficiency and support for renewable sources of energy, like solar and wind power.
The net impact of the climate change levy and the associated reduction in National Insurance Contributions on individual sectors will depend on the rates at which the levy is set. The final rates of the levy will not be set until the Finance Bill 2000.