§ Dr. KumarTo ask the Chancellor of the Exchequer (1) if he will estimate the effect on the balance of payments of the impact which the climate change levy will have on the chemical and steel industries in the 10 years after its introduction; [88104]
(2) what action he proposes to take to ensure that manufacturing industry remains competitive after the introduction of the climate change levy; and if he will make a statement; [88106]
(3) what assessment he has made of the effect the introduction of the climate change levy will have on inward investment in each sector of industry; and if he will make a statement; [88113]
(4) what assessment he has made of the effect of the climate change levy on energy-intensive industry on (a) direct and (b) indirect employment in that industry over the next five years; and if he will make a statement; [88010]
(5) what assessment he has made of the impact of the introduction of the climate change levy on global carbon dioxide emissions caused by industry relocating to countries with less stringent environmental legislation; and if he will make a statement; [88064]
607W(6) what assessment he has made of the scope for other European Union countries to introduce the climate change levy at rates which are low but consistent with them achieving their Kyoto commitment; and if he will make a statement; [88114]
(7) on what basis the calculation of the revenue generated from the introduction of climate change levy was made; and if he will make a statement; [88199]
(8) if he will publish his targets in terms of income from national insurance contributions and allowances for energy efficiency agreements on an industry by industry basis; and if he will make a statement; [88225]
(9) what estimate he has made of the net financial impact on the Government following the introduction of the climate change levy, in terms of the reduction of national insurance contributions for (a) central Government employees and (b) local government and public services employees; and if he will make a statement; [88322]
(10) what assessment he has made of the advantages of basing the climate change levy on the amount of carbon dioxide released; and if he will make a statement; [88387]
(11) if he will assess the (a) benefits and (b) disadvantages of applying the climate change levy to domestic consumers; and if he will make a statement. [88323]
§ Ms HewittThe climate change levy is estimated to save around 1.5 million tonnes of carbon a year by 2010, thereby making a very significant contribution to meeting the Government's legally-binding target for reducing greenhouse gas emissions set under the Kyoto Protocol, and its domestic goal of a 20 per cent. cut in carbon dioxide emissions by 2010.
The climate change levy will entail no increase in the overall burden of tax on business as the revenue will be fully recycled via a 0.5 percentage point cut in employer National Insurance Contributions. Business will also benefit from an additional £50m for schemes aimed at promoting energy efficiency and support for renewable sources of energy, like solar and wind power.
Following Lord Marshall's recommendations, and the Government's Statement of Intent on Environmental Taxation, the Government recognise the need for special consideration to be given to energy intensive industries given their energy usage and exposure to international competition. Consequently, significantly lower rates of tax will be set for those energy intensive sectors that agree targets for improving their energy efficiency. A number of sectors including the aluminium, iron and steel, and chemicals sectors are currently involved in those negotiations. The net impact of the climate change levy and the associated reduction in National Insurance contributions on individual sectors will depend on the rates at which the levy is set. The final rates of the levy will not be set until Finance Bill 2000.
The Government are keen to work with business on the detailed design and administration issues relating to the levy. HM Customs and Excise have just completed a further round of consultation on these issues and the Government are assessing these responses alongside other representations in deciding how to design the levy to maximise the environmental benefits whilst safeguarding competitiveness.
608WAs the Government's climate change consultation document makes clear, all sectors of the economy will need to play their part in tackling the problem of climate change. It is not the Government's intention to introduce new taxes on domestic fuel and power, for social policy reasons. However, there are a number of measures in place to encourage energy efficiency in households, including the Home Energy Efficiency Scheme. These measures are set out in the climate change consultation document and will form part of the climate change strategy to be published later this year.
The UK is not alone in having to meet targets for reducing greenhouse gas emissions, or in using economic instruments to do so. Since 1990, seven EU countries have introduced explicit taxes on the carbon or energy content of fuels, including most recently, the Tco-Tax' introduced by the German government. On current projections, most OECD countries will have to introduce new measures of one form or another to meet their Kyoto obligations.