Climate Change Levy (Hansard, 27 October 1999)

§ Mrs. Liddell

The Government have had extensive discussions with industry about the impact of climate change levy, which was announced by my right hon. Friend the Chancellor of the Exchequer in his Budget Statement on 9 March 1999,Official Report, columns 173–90.

The Government have made clear that they wish to design the levy in a way which maximises its environmental benefit while seeking to protect competitiveness. They have been concerned to develop the best possible understanding of business's perspective in discussions over recent months, in order to inform their decision on the levy for the Finance Bill 2000.

The Government have said that they recognise the special circumstances of energy intensive sectors of business in this context including their energy usage and exposure to international competition. The Department of the Environment, Transport and the Regions (DETR) has been leading the discussions with a number of key trade associations representing energy intensive sectors to develop negotiated agreement. Under these agreements, sectors which are to be subject to Integrated Pollution Prevention and Control regulation would earn significantly reduced rates of the climate change levy in return for commitments to targets for energy efficiency and/or emissions reduction. The DETR has been conducting detailed negotiations with an initial ten trade associations. Some initial offers of targets have now been made. The period for these discussions has been extended from mid-October to 20 December in order to give the trade associations more opportunity to consult their members.