§ As Britain works to lead in the new economy, we must resolve to lead also in respecting the environment.
§ Our Government's target is to reduce greenhouse emissions by 12½ per cent. by 2010. So today, I am announcing a programme of measures that will cut carbon pollution by 3 million tonnes.
§ My first proposal alone will reduce carbon pollution by 1.5 million tonnes. The Government have received Lord Marshall's report, for which I thank him, on the role of economic instruments and the business use of energy.
§ We will now implement Lord Marshall's recommendations and we will introduce a levy on business use of energy from April 2001. And it will be brought in, after further consultation with the industry, on a revenue-neutral basis, with no overall increase in the burden of taxation on business. Because we intend at the same time to cut the main rate of employers' national insurance contributions from 12.2 per cent. to 11.7 per cent.
§ We also intend to set significantly lower rates of tax for energy-intensive sectors that improve their energy efficiency. Today, we are inviting these companies to submit their proposals. In pursuit of our policies for sustainable development, we will allocate an extra £50 million to encourage business to invest in the new environmental technologies and in renewable fuels.
§ In line with the fuel escalator first introduced by the previous Government at 5 per cent. above inflation and now 6, petrol duty will rise from 6 pm today.
§ Vehicle excise duty for smaller cars will, from 1 June this year, be cut by £55—the first cut in the licence fee in 50 years. Other cars' rates are only increased in line with inflation.
§ I will freeze vehicle excise duty for 98 per cent. of all lorries, and for lorries and buses with clean engines I am cutting the licence fee by up to £1,000.
§ To encourage a switch to cleaner fuels, last year I promised to give an additional tax advantage to ultra-low sulphur diesel. By the end of the year, almost all producers will have switched to this cleaner fuel. This alone will cut their emissions by 20 per cent. and at a revenue cost of over £400 million, I will maintain this favourable tax treatment for cleaner diesel.
§ I also propose a reform to reward the use of fuel-efficient company cars and to remove today's counter-productive incentive to drive more miles in order to get bigger discounts. So I start in this Budget with a measure that will cost the company car user with a typical car around £1 a week. This reform—to link tax to emissions—will be implemented finally in 2002 on a revenue-neutral basis.
182§ To reduce pollution, employees from this year will be able for the first time to secure tax-free from their employer the benefit from employer-run or employer-subsidised buses, car-sharing schemes and other environmentally friendly means of transport to work.
§ Last year, we set up the new rural transport fund. To build on its success in extending the range of public transport services in rural communities, we will increase its funding—and, therefore, its accessibility for rural services—for the next two years by 20 per cent. to £120 million.
§ To reduce the amount of waste going to landfill, the landfill tax, £10 per tonne in 1999, will in future rise by £1 per tonne per year.
§ Taking into account all these tax changes and all the changes that I have yet to announce, there will be a net tax cut of £4 billion in this Budget.