Clause 13
Finance Bill
3:30 pm
John Healey (Financial Secretary, HM Treasury; Wentworth, Labour)
First, the hon. Gentleman is wrongin many respects about the climate change levy andthe commentators are wrong about climate change agreements. Together, these measures have delivered for this country more than a quarter of the target for emissions reduction that we are working towards under our Kyoto obligations; that is a very significant contribution to our efforts to help the world to tackle the climate change problems that we face.
I suppose that I should welcome the fact that the hon. Gentleman will not oppose this legislation and this increase. I suppose that, in some ways, we are making progress, because he and his party opposed the climate change levy when we introduced it in 2001. The Chief Secretary, who I think was responsible for that legislation at the time, remembers how fiercely it was opposed by the Conservatives, who would not accept the case for trying to introduce an Act to tackle climate change and would not accept the case for the climate change levy.
In fact, by 2010 the climate change levy will deliver carbon savings of more than 3.5 million tonnes a year; the climate change agreements will deliver climate change savings of more than 2.8 million tonnes a year, and together they are a central plank in our efforts to make such savings.
The levy itself was designed less to have an impact on generators and more to encourage greater energy efficiency among energy users, particularly business users. To that extent, it is succeeding in the specific aims that we set for it. We monitor constantly the way in which the levy and climate change agreement operate. Clearly, we must consider some longer-term questions, particularly given the interaction with a strengthened European Union emissions trading scheme.
That is for the future, however. The clause will increase the rates for the climate change levy in line with inflation from April next year. We have always said that the rates at which the climate change levy are charged should rise with inflation over time. We legislated for this year’s increase in last year’s Finance Bill. We are doing the same this year to provide advance notice for the industry and others affected by the changes to the climate change levy.