18 February 2000
UK rethinks discount on climate levy

THE UK government is considering making “significant concessions” on the climate change levy, according to a report in the Financial Times.

The concessions, due to be announced in the Budget in March, would address complaints by big energy users, including pig and poultry farmers.

They claim they have been excluded from the discount scheme which was announced in December.

The scheme gives companies up to 80% off the levy in return for negotiated agreements on pollution cuts.

But it only covers sites regulated by the European Unions integrated pollution prevention control (IPPC) rules.

This has the effect that environmentally friendly companies will pay the full levy, while those with a pollution problem receive discounts.

On Thursday National Farmers Union president Ben Gill and Financial Secretary to the Treasury Stephen Timms met to discuss the levy.

Mr Gill argues that the levy on gas, coal and electricity usage will cost the industry around 20 million, and will hit horticulture especially hard – despite having achieved significant improvements in energy efficiency.

The NFU warns that without a suitable exemption from the levy, the lack of confidence and ability to compete on the world market will lead to wide scale business closure or relocation abroad.

The governments 80% discount has itself become mired in controversy after reports that the Chancellor misled business leaders.

It was claimed this week that the true support to industry in this discount – billed as worth 100m – is barely worth 5m.