§ Mr. Barry JonesTo ask the Secretary of State for Wales what assessment he has made of the impact of the world climate levy upon industry; and if he will make a statement. [86344]
§ Ms HewittI have been asked to reply.
The climate change levy will make a significant contribution to meeting the UK's legally-binding target for reducing greenhouse gas emissions set under the Kyoto Protocol and our domestic commitments to further reductions. It will entail no increase in the overall burden of tax on business, since it will be accompanied by a 0.5 percentage point cut in the main rate of employers' National Insurance Contributions. This will reduce the cost of hiring workers and encourage employment opportunities. Business will also benefit from an additional £50 million a year for schemes aimed at promoting energy efficiency and additional support for renewable sources of energy, like solar and wind power.
The impact of the climate change levy on any one industry, firm or plant will depend on the tax rates set for different sectors. The Government are well aware of the need to protect the competitiveness of British industry and intend to set significantly lower rates of tax for those energy intensive sectors that agree targets for improving their energy efficiency. A number of energy intensive sectors are involved in these negotiations.