Clause 17
Finance Bill
2:00 pm
Kitty Ussher (Economic Secretary, HM Treasury; Burnley, Labour)
The hon. Gentleman’s comment will go into Hansard. However, under his amendment, the levy would be based on emissions rather than on energy supply. There would be a technical problem with doing that—as well as legal problems—notwithstanding the fact that amending the introduction to the clause is insufficient to achieve the legal outcome that is required. However, I take his amendment in the spirit in which it is intended, so I will overlook that problem. The real problem is that the amendment would be contrary to European Union directive 2003/96, which requires a tax on energy supply rather than emissions.
The main problem that I urge Committee members to consider stems from the fact that our climate change levy has been incredibly successful as devised. An independent analysis by Cambridge Econometrics, published at the time of the 2005 Budget, estimated that it had delivered emissions savings of more than 16 million tonnes of carbon up to that point, that by 2010 it would save some 3.5 million tonnes of carbon a year—well above initial estimates—and that it would reduce energy demand in business and public sectors by some 15 per cent. a year. The hon. Gentleman’s amendment is therefore unnecessary.