HC Deb 03 December 2002 vol 395 cc678-9W
Mr. Drew

To ask the Chancellor of the Exchequer (1) what evaluation he has carried out into the operation of the climate change levy, with specific reference to(a) manufacturing, (b) the service sector and (c) small and medium sized enterprises; [84810]

(2) if he will make an assessment of the financial cost to the British manufacturing industry of the climate change levy. [84813]

John Healey

All industries face the same general challenges and opportunities from the climate change levy.

All revenue from the levy is recycled back to business through reductions to employer national insurance contributions (NICs) and support for energy efficiency. While the levy package is broadly revenue neutral to business as a whole, the effects on any specific sector will depend on a number of factors, including: the future energy consumption of firms in the sector and the use they make of levy funded energy efficiency support; employment levels in those sectors and the benefits received from the levy funded NICs cuts; what use firms in that sector make of electricity generated from levy-exempt renewable sources of energy and combined heat and power; and use made of the 80 per cent, discount where this is available via voluntary agreements with energy-intensive sectors.

Mr. Drew

To ask the Chancellor of the Exchequer if he will make a statement on the current status of discounts allowable under the climate change levy. [84811]

John Healey

Sectors of industry which are covered by the Pollution Prevention and Control Regulations Part A are eligible for an 80 per cent, discount in the rate of levy, provided they enter into an agreement with the Department for Environment, Food and Rural Affairs (DEFRA) to meet energy efficiency targets. The Government have also given a five year 50 per cent, discount to protect the competitiveness of horticulture.

Mr. Drew

To ask the Chancellor of the Exchequer what recent discussions he has had with the CBI on the issue of the climate change levy. [84814]

John Healey

As part of the normal process of contact with business, the Chancellor of the Exchequer and Treasury Ministers have met a variety of businesses and business organisations and have heard a range of representations. As the Chancellor said in his answer of 11 February 2002,Official Report, columns 114–115W, inline with previous Administrations, it is not this Government's practice to provide details of the meetings they routinely have with a wide range of organisations.

Mr. Drew

To ask the Chancellor of the Exchequer what advice he is giving to manufacturers who wish to reduce the impact of the climate change levy by introducing combined heat and power. [84815]

John Healey

Currently, all supplies of taxable commodities for use in producing any outputs from good quality combined heat and power (GQCHP) are exempt from the levy. Also, all GQCHP electricity supplies sold direct to customers are free from the levy.

In Budget 2002, the Government announced that exemption would be extended to include all supplies of electricity from GQCHP. The exemption will be introduced after it has received state aid clearance from the European Commission.

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