§ Mr. LoughtonTo ask the Chancellor of the Exchequer (1) what industries will be eligible to claim grants for energy efficiency measures under the scheme announced in his pre-Budget report; how such awards will be calculated; and what will be the maximum amount available; [111018]
(2) how the scheme for supporting energy efficiency measures announced in his pre-Budget report is to be funded; [111016]
(3) what new money will be available from the Treasury to fund the grants available for energy efficiency measures announced in his pre-Budget report. [111017]
§ Mr. TimmsIn the November 1999 Pre-Budget Report, the Chancellor announced that, following the responses to the consultation exercise on the climate change levy carried out after the March 1999 Budget he would be trebling the support for energy efficiency measures under the climate change levy package. This is to say that £150 million of levy revenues, not £50 million as originally proposed, will be made available to fund energy efficiency measures in business in 2001–02. This additional support will represent a step change in the level of funding for energy efficiency measures in the business sector.
The £150 million of additional support that will now be available in 2001–02 will have two elements. The first is £50 million energy efficiency fund, first announced in the March 1999 Budget. This fund will be used to:
provide energy efficiency advice/audits to small and medium sized enterprises;promote the development of 'new' sources of renewable energy; andencourage the research, development and take-up of low carbon technologies and energy saving measures through a 'carbon trust'.Final decisions on the use of the £50 million fund will be made in the Spending Review 2000.
The second element is enhanced capital allowances for firms making energy saving investments. Firms making qualifying investments will be able to deduct the full costs of those investments in arriving at their income tax or corporation tax bills. All firms making qualifying investments will be eligible to claim the allowances. A consultation exercise has just been carried out on which energy efficient technologies and products might qualify for the enhanced allowances. The Government's suggested initial selection includes combined heat and power, boiler systems, motors, variable speed drives and lighting systems. Depending on take-up, the scheme might have an Exchequer cost of up to £100 million in 2001–02.
Taken together, these measures will give a considerable boost to energy efficiency measures in the business sector and help meet the Government's targets for reducing greenhouse gas emissions.