HC Deb 11 April 2002 vol 383 cc144-5
8. Mr. Eric Illsley (Barnsley, Central)

If he will make a statement on the operation of the climate change levy. [44505]

The Financial Secretary to the Treasury (Mr. Paul Boateng)

The climate change levy is designed to promote greater energy efficiency, and to be revenue neutral. Part of the levy revenue is being recycled to provide enhanced energy efficiency advice to business and to provide support for energy efficiency investments. We are on target to meet our Kyoto obligations to reduce carbon emissions.

Mr. Illsley

I am grateful for my right hon. Friend's response, but will he look again at those companies that do not qualify for integrated pollution prevention and control status and thus cannot take advantage of the rebates introduced by the Government? I refer particularly to a company about which my right hon. Friend may have heard during his recent visit to Barnsley—Potters Ballotini—which uses 100 per cent. recycled materials. It seems anomalous that a company using recycled materials should suffer from having to pay the full climate change levy. Will he look again at the operation of the system?

Mr. Boateng

I learned very intimately from meeting business people in Barnsley of the interest and concern that my hon. Friend takes in these matters. Such a company would be well placed to benefit from the considerable advice and financial support that the Government are making available to those who want to make energy efficiency savings. However, my hon. Friend will appreciate that the tax is on energy; it was designed by Lord Marshall to help us to meet our Kyoto obligations, and it is doing that. It is benefiting businesses through the reduction in national insurance contributions and through the advice and assistance of the Carbon Trust. I hope that the company to which my hon. Friend referred will feel able to approach the trust and ourselves for any advice that it might require.

Mr. David Lidington (Aylesbury)

I should have more respect for the Financial Secretary if he were prepared to take responsibility for the Government's decisions rather than to hive it off to Lord Marshall or anybody else they have hired to give advice. Surely his hon. Friend the Member for Barnsley, Central (Mr. Illsley) made an extremely important point, which is relevant to the interests of a large number of manufacturing businesses throughout the country that do not qualify, under IPPC regulations, for taking part in a climate change agreement. What answer does the Financial Secretary have for a company such as Plastic Technologies of Smethwick? It tells me that it faces an annual climate change levy bill of about £61,000 but that it will receive national insurance rebates of just over £4,000. Is not the truth that the Government have picked a complex and bureaucratic method of taxing companies which will deliver small environmental benefits but which has already distorted markets and is placing burdens on British manufacturing companies that their foreign competitors do not have to bear?

Mr. Boateng

The benefits are real and tangible. They are appreciated by a range of companies and, indeed, the citizens of this country because they are designed to enable us to respond to climate change—to enable us effectively to deliver a response that cuts carbon emissions. The hon. Gentleman is wrong to sneer at the care and detailed attention that was paid to consulting industry. Lord Marshall, a distinguished leader in industry, was extremely helpful in enabling us to get the right solution to a very real problem.

It ill behoves Opposition Members to make wild promises in their election manifesto to abolish that tax without making even one minute suggestion—one iota—on how emissions might otherwise be reduced. They wish the ends but are completely bereft when it comes to the means.

Mr. Peter Pike (Burnley)

Does my right hon. Friend recognise that every energy user, such as the glass and paper industries, still feels disadvantaged, despite Government moves to meet their requirements on the climate change levy? They feel that they are at a disadvantage with their competitors. Does he also recognise that they feel more concern about the massive increase in gas charges, which mean that they are paying far more than those on the continent?

Mr. Boateng

We do indeed recognise that, and the Government will respond in due course to the performance and innovation unit report on the issue. It is important that we continue our dialogue with industry. We have met the CBI and continue to work with its officials on the IPPC definition, about which we have heard. We have a tax that is sound in its essentials and is delivering the objectives that the whole House surely seeks.

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