Clause 17
Finance Bill
2:00 pm
David Gauke (Shadow Minister, Treasury; South West Hertfordshire, Conservative)
We have some sympathy with the objective outlined by the hon. Member for Taunton, but whether that is because of the brilliance of his speech or otherwise I leave others to decide. However, we share the view that the climate change levy is an imperfect tax. My right hon. Friend the Member for West Dorset (Mr. Letwin) once said, in a typically erudite allusion, that it reminded him of what history masters used to say about the Holy Roman empire: it was neither holy nor Roman nor an empire. The climate change levy is not really about climate change: it is a tax on energy. Although that might be an aspect of reducing carbon emissions, it is not the complete story, because if we want to reduce carbon emissions we need to distinguish between sources of energy that produce a lot of carbon and those that do not. The climate change levy does not sufficiently address that matter and is therefore flawed. I have a lot of sympathy with what the hon. Member for Taunton said and with the objective proposed in amendment No. 57.
Others have criticised the climate change levy: the Royal Commission on Environmental Pollution described it as a blunt instrument, and the Select Committee on Environmental Audit also made a number of criticisms. The levy is flawed and is not ideal, so there is accordingly a need to reform it into a carbon tax, which it is not at the moment, rather than an energy tax. Although I have expressed sympathy for the amendment, whether it does everything that the hon. Member for Taunton would like it to do is another matter. But as far as the objective is concerned, we hope that the Government will listen and reform the climate change levy and replace it with a genuine carbon tax.