---

Budget Resolutions and Economic Situation

I can give the assurance that in the energy review that is one specific aspect that we will be examining. I agree that the problem needs to be resolved. The climate change levy package has saved over 28 million tonnes of carbon since it was introduced, and is expected to save a further 6 million tonnes a year, so that by 2010 it will account for 40 per cent. of the UK’s total carbon reductions. The Budget announced that from next year the climate change levy will increase in line with inflation. Even after taking into account these increased rates, business will still benefit from the overall climate change levy package. The 0.3 per cent. reduction in national insurance contributions brought in at the same time as the levy saves business £900 million a year, whereas the levy costs about £600 million a year. The Conservative party remains opposed to that progressive measure. If we were to follow its approach, there would be a further 6 million tonnes of carbon a year in the atmosphere, which is equivalent to the combined emissions from Birmingham, Leeds, Manchester and Sheffield. Climate change is not only an issue for business. The Budget includes measures to insulate a further 250,000 homes over the next two years, bringing forward annual carbon savings of 35,000 tonnes and reducing annual household bills by around £20 million. We will also put £5 million over the next two years into a new large-scale trial of smart metering, which will be matched by private sector funding. That will help us, as consumers, to understand and look harder at our own energy consumption. In conclusion, this is a forward-looking Budget. It equips today’s Britain for tomorrow’s vital challenges. It reduces burdens, promotes competitiveness and raises productivity. It is a Budget for business and it is a Budget for industry, and I commend it to the House.