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Climate Change Levy

Volume 401: debated on Wednesday 19 March 2003

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What recent representations he has received about the effects of the climate change levy on manufacturing industry in Wales.

My right hon. Friend the Secretary of State has received a number of representations from individual companies and groups representing business, including the CBI.

Will the Minister confirm that, on its introduction, the Treasury said that the climate change levy would be broadly neutral for business, that manufacturing has, in fact, suffered a £90 million net tax hit, that Wales is particularly hard hit with 28 per cent. of its gross domestic product dependent on manufacturing and, furthermore, that the Engineering Employers Federation's counter-proposals would lead to greater reductions in energy use and a lower cost to business in Wales and elsewhere? [Interruption.]

The Government are committed to making Britain one of the most competitive business environments in the world. That has been demonstrated by the fact that our tax burden on business and industry is the lowest of all our major competitors, but we recognise, too, that business and industry must make a contribution to improve and protect our environment. I mentioned in my initial answer to the hon. Gentleman that my right hon. Friend the Secretary of State recently met representatives of the CBI. The director of the CBI in Wales fully understands the Government's position; nevertheless, my right hon. Friend took on board the points made by the director with regard to the climate change levy and, as a result, he is in discussion with my right hon. Friend the Chancellor of the Exchequer.

Does my hon. Friend accept that the climate change levy has been a problem for Corus? He will be acutely conscious, as I am, of the difficulties currently facing Corus. Will he join me in praising the achievements and spirit of the whole work force at Llanwern? Will he undertake to examine urgently, with colleagues in Wales and Whitehall, whether any aspect of public policy unnecessarily disadvantages Corus in doing its business? If he identifies one, will he act swiftly to deal with it?

My right hon. Friend the Secretary of State for Wales has been involved in detailed discussions with the management of Corus and other Ministers about the company's concerns. He carried on that job of work from the former Secretary of State for Wales, who also played an important part in helping to secure a package when Corus announced its job losses. The Government will work in partnership with colleagues in the Assembly and with Corus in every way possible to avoid any further job losses at Llanwern.

Will the Minister specifically consider offering further concessions to the steel industry in relation to the climate change levy and take into account the industry's concerns about the effect of the landfill tax? Can he confirm that the UK Government have sought approval from the Commission for emergency state aid on a contingency basis, which the Dutch Government have already done?

I can tell the hon. Gentleman that the Government have made available £30 million a year in incentives for organisations that volunteer to take part in the UK emissions trading scheme. We are working with the industry and colleagues in the European Union to ensure that we are doing the right thing and that that does not impact adversely on business and industry in Wales. I think that we are doing a good job in that respect.