Climate Change Levy

Treasury written question – answered on 16th October 2001.

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Photo of Mr Peter Duncan Mr Peter Duncan Conservative, Galloway and Upper Nithsdale

To ask the Chancellor of the Exchequer what the projected cost is to (a) UK and (b) Scottish industry of implementation of the climate change levy over the next three years.

Photo of Mr Paul Boateng Mr Paul Boateng Financial Secretary, HM Treasury, The Financial Secretary to the Treasury

The climate change levy will raise an estimated £1 billion in its first year, all of which will be recycled back to business through national insurance contribution cuts and support for energy efficiency. While the levy is broadly revenue neutral, it is not possible to say at this stage what the effects on any specific country, sector or industry will be. That will depend on a number of factors including:

the future energy consumption of firms in the country/region/ sector and employment levels in those firms; the number of energy intensive firms in that country/region/sector that are eligible to receive a discount on the main rates of the levy by signing up to an energy efficiency agreement; what use firms in that country/region/sector make of electricity generated from 'new' renewable sources of energy and in 'good quality'.

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