HC Deb 03 July 2000 vol 353 cc95-6W
Dr. Kumar

To ask the Chancellor of the Exchequer if he will list those industry sectors and businesses given(a) full and (b) partial exemption from the climate change levy. [128631]

Mr. Timms

The Government's aim in designing the climate change levy has been to maximise its environmental effectiveness while safeguarding the competitiveness of UK business.

The Government have recognised the case for giving special treatment to energy intensive sectors because of their high energy costs and their exposure to international competition. Those eligible energy intensive sectors which enter into agreements to implement all cost-effective energy saving measures and achieve carbon or emissions targets which meet the Government's criteria will qualify for an 80 per cent. discount from the levy rates.

Sectors which have already agreed indicative energy efficiency targets are Cement; Food and Drink (as represented by the Food and Drink Federation); Glass; Non-ferrous metals; Aluminium; Paper; Chemicals; Foundries; Steel and Ceramics. A number of smaller energy intensive sectors are also involved in negotiations for a sector agreement. Details of the final agreements will be published later in the year.

The Government have also recognised the unique position of horticulture as an energy intensive sector, exposed to international competition but not eligible for a negotiated agreement and benefiting from special treatment in other EU states. Budget 2000 announced a special package of measures for the horticulture sector: targeted support from the climate change levy energy efficiency fund; extending the list of investments qualifying for enhanced capital allowances to include thermal screens; and a temporary 50 per cent. discount on the levy for a period of up to five years while energy efficiency measures take effect.

The Government believe, in line with the view expressed by Lord Marshall, that all businesses should have the incentive to save energy at the margin. For this reason there are no total sectoral exemptions from the levy.