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Climate Change Levy

Part of Oral Answers to Questions — Treasury – in the House of Commons at 11:30 am on 19th July 2001.

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Photo of Mr Paul Boateng Mr Paul Boateng Financial Secretary, HM Treasury, The Financial Secretary to the Treasury 11:30 am, 19th July 2001

The climate change levy will raise an estimated £1 billion in its first year, all of which will be recycled back to business through cuts in national insurance contributions and support for energy efficiency.

Although the levy is broadly revenue-neutral, it is not possible to say at this stage what the effects on any specific sector or industry will be. That will depend on several factors, including the future energy consumption of firms in the sector and employment levels in those firms, the number of energy-intensive firms in the sector that are eligible to receive a discount on the main rates of the levy by signing up to an energy efficiency agreement, and what use firms in that sector make of electricity generated from levy-exempt new renewable sources of energy and combined heat and power.