HC Deb 20 June 2002 vol 387 cc398-9
6. Mr. Laurence Robertson (Tewkesbury)

What recent representations he has had from manufacturing industry on the impact of the climate change levy. [60342]

The Economic Secretary to the Treasury (John Healey)

As part of the normal process of contact with business, my right hon. Friend the Chancellor of the Exchequer and the Treasury ministerial team have met a variety of businesses and business organisations and have heard a range of representations, including those on the climate change levy.

Mr. Robertson

I am grateful for that reply. I suppose that the Minister will have met the Engineering Employers Federation, among other organisations. The federation has said that the climate change levy impedes manufacturing initiative and enterprise. Given the problems caused by the weakness of the euro and the decline that has continued in the manufacturing industry, do not the Government rather regret introducing the climate change levy, which is yet another problem that manufacturing industry has had to face?

John Healey

On the contrary, all sectors have a part to play in reducing carbon emissions, which are a major part of climate change challenges. All revenues to the Treasury have been recycled as a result of the climate change levy. There have been national insurance contribution cuts and a significant boost to energy efficiency support. It is important, as the Engineering Employers Federation will recognise, not to look at one tax alone. The level of business taxation means that, with corporation tax cuts, we have the lowest rates ever in the UK.

The federation will know also that research and development tax credits mean that large companies and small companies, especially in manufacturing, are benefiting. That has been welcomed. The OECD recognises that business tax rates in the UK are lower than those of 12 of our EU competitor countries.

Ms Joan Walley (Stoke-on-Trent, North)

Along with my other north Staffordshire colleagues, I have been having close talks with the ceramic industry across the region. Contrary to the Luddite approach that we have heard from Opposition Members, that industry in the potteries is saying that it is at the forefront of helping this country to meet its international obligations.

Will my hon. Friend recognise that where we have carbon trading and a September end of year, as in the pottery industry, it is essential that as well as informal guidance we also have precise rules, so that the companies that will need to buy carbon credits know exactly how they can meet their targets and how, more importantly, they can benefit from the rebate? When can we have these rules?

John Healey

I am glad to hear that businesses in my hon. Friend's constituency are keen to play a part in reducing carbon emissions to help to address the climate change challenges. The climate change levy has been operational only since 1 April last year. It needs longer to bed down, but, in keeping with all other taxation, my right hon. Friend the Chancellor keeps the detailed operation and the impact of the levy under constant review as part of the normal budget process.

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