---

Dept of the Environment Transport and the Regions

Answer

Mr. Nicholas Winterton: To ask the Secretary of State for the Environment, Transport and the Regions if he will list the long-term objectives of the proposed climate change levy; and what assessment he has made of the effect the climate change levy will have on non-intensive energy users. [83705] Mr. Meale: The climate change levy is intended to make a significant contribution to meeting our greenhouse gas targets--an estimate 1.5 million tonnes of carbon per annum. It is one of a number of measures being developed as part of a substantial package to help the UK achieve its climate change objectives and enable the Government to continue to play a leading role in international efforts to tackle climate change. The climate change levy has been designed to be revenue neutral across the business economy as a whole. Non-intensive energy users will be expected to pay the full rate of climate change levy but, like all sectors of business, they will receive a reduction of 0.5 percentage points in their National Insurance Contributions. In line with the recommendations made by Lord Marshall in his report on "Economic Instruments and the Business Use of Energy", the Government intend to retain an incentive for all users to save energy at the margin. Firms which are non-intensive users of energy but which are labour intensive will tend to be net gainers from the budget package. The accompanying cut in employer National Insurance contributions will encourage employment opportunities, while the additional support for energy efficiency measures will help stimulate the development of new technologies. The latest forecasts from the Meteorological Office's Hadley Centre estimate that average temperatures will rise by up to 3.5 per cent. by the end of the next century. As part of the international effort to tackle climate change, the UK has signed up to a legally binding target of 12.5 per cent. reduction in greenhouse gas emissions on 1990 levels by 2008-12. The Government propose to go further than this and have set a domestic goal of a 20 per cent. reduction in emissions of carbon dioxide-- the most significant greenhouse gas--by 2010.

Secondary information

Type

Written question

Reference

83705; 331 c154W

Session

1998-99

Subjects

Climate Climate change Carbon dioxide Carbon Employment Environment protection Energy National insurance contributions Pollution control Taxation

Contains statistics

Yes