HC Deb 05 July 1999 vol 334 cc337-8W
Dr. Kumar

To ask the Secretary of State for Trade and Industry what assessment he has made of the extent of changes to energy savings targets for industrial sectors between 1990 and 2010; what proportion of the changes will have resulted from(a) adjustments in the economy and (b) the climate change levy; and if he will make a statement. [88011]

Mr. Battle

The Government intend to set significantly lower rates of the climate change levy for energy intensive sectors that agree targets for improving energy efficiency. Detailed negotiations on these targets are now underway with a number of industrial sectors with the intention of reaching agreement in October 1999.

Over the period 1990–2000, the Government's climate change consultation paper estimated that about 70 per cent. of the fall in industrial carbon dioxide emissions relative to the increase in GDP is the result of large-scale fuel switching in electricity supply. Around three quarters of this fall is the result of the introduction of gas fired generation and the remainder from improved productivity of nuclear power and increased renewable energy. A further 10 per cent. can be attributed to changes in the UK's industrial structure and some 20 per cent. comes from improvements in energy efficiency.

The climate change levy is expected to save around 1.5 million tonnes of carbon a year by 2010.

Future reductions in greenhouse gases to 2010 from different sectors will depend on the policies and measures adopted as part of our climate change programme.

Dr. Kumar

To ask the Secretary of State for Trade and Industry what measures he will take to ensure that gas and electricity prices are competitive within the European Union after the climate change levy is introduced; and if he will make a statement. [88012]

Mr. Battle

The Government are committed to the promotion of competition in energy markets which will maintain downward pressure on pre-tax prices.

The White Paper "Conclusions of the Review of Energy Sources for Power Generation" sets out the Government's broad energy policy, including radical reforms to the electricity market. These reforms will bring greater competition to the wholesale market and lower prices for consumers. New arrangements to improve the competitiveness of the gas market will be introduced in October this year.

Proposals for the climate change levy also recognise the need to have regard to the competitiveness of UK industry. The Government intend to set substantially lower rates of levy for those energy intensive sectors that enter into negotiated agreements on their energy use and emissions.