§ 2. Mr. Peter Luff (Mid-Worcestershire)If he will exempt horticulture from the climate change levy. [121371]
§ The Financial Secretary to the Treasury (Mr. Stephen Timms)No. We have recognised the unique position of the horticultural sector, with a special package of support, including a 50 per cent. discount on the levy for up to five years while energy efficiency measures take effect.
Our approach will help improve energy efficiency in the horticultural sector, while protecting its competitiveness.
§ Mr. LuffAlthough the concessions are welcome, why is the Treasury pressing ahead with the imposition of the tax? Is that not another example of the Government's gimmick-ridden, soundbite-driven policies, which are stealthily strangling British business? Why, instead of imposing a tax of £12,500 per hectare on glasshouse growers in the United Kingdom, do the Government not follow the example of the Netherlands, where growers have been granted a 100 per cent. exemption from the levy in return for an agreement on emissions?
§ Mr. TimmsThe hon. Gentleman is wrong on several points. There is no longer a 100 per cent. exemption in 441 the Netherlands. We have taken account of the way in which the horticulture sector is treated elsewhere in the European Union. That is reflected in the strong additional package of support for horticulture that we have announced. I am glad that the hon. Gentleman welcomes it. The climate change levy arose from work that was carried out by Lord Marshall, who began it when he was president of the Confederation of British Industry.
Organisations such as the Council for the Protection of Rural England and the Royal Society for the Protection of Birds have said:
As we are cutting carbon emissions from fossil fuels, the new levy will make UK plc more competitive. Which is why Lord Marshall, chairman of British Airways, recommended using taxation… We think the Chancellor is introducing an essential levy that will support forward thinking industries and help to protect our environment. We applaud him for it.I hope that the hon. Gentleman does so too.
§ Mr. Barry Sheerman (Huddersfield)Does my hon. Friend agree that if horticulture needs some second thoughts and perhaps more concessions, manufacturing industry, too, needs a break? The manufacturing sector is trying to export at a time when the exchange rate is causing difficulties. It takes that on board, but it does not want a double hit through the levy. Could not we put it on hold for a while or ameliorate the position in some way?
§ Mr. TimmsNo, it is important that we go ahead with the levy. We have given a long period of notice so that everyone can make the necessary preparations. We have introduced a range of measures to boost the position of United Kingdom manufacturing, including the measures in the Budget on capital allowances, and there have been announcements recently about new orders for UK manufacturing.
We have recognised the particular position of the horticulture sector. We have recognised, too, the special treatment afforded to horticulture elsewhere in the European Union, but our approach is the right one. My understanding is that 60 per cent. of the energy used in manufacturing will be covered by the concessionary negotiated agreements.
§ Mr. David Heathcoat-Amory (Wells)Is the Financial Secretary aware that the brief flirtation between British industry and the Government is now well and truly over, because of the endless stream of new regulations and new business taxes, of which the levy is a good example? Will he confirm that the required CO2 reductions could easily be achieved by other less damaging means, as has been confirmed by the Government's own figures? Will he also confirm that sectors such as horticulture are likely to try to avoid the tax by moving to other countries, including those with lower environmental standards? Therefore the new business tax will damage not only British industry and jobs, but the world environment.
§ Mr. TimmsThe right hon. Gentleman is wrong. As I have told the House, the levy emerged from discussions with the CBI. The then president of the CBI carried out the initial work that led to its introduction. He recommended the use of taxation to deal with the climate change problem.
442 I remind the right hon. Gentleman of the views of the previous Government's Secretary of State for the Environment. I have already put this quotation to him, and I would have hoped that by now, he would have taken it to heart. The former Secretary of State said:
Ozone depletion and climate change are not concerns which can be met in the short term. They demand alterations in our lifestyles which are neither easy nor quick.We are making the changes that need to be made. That is the right thing to do.