Letter to Shadow Financial Secretary to
Thank your for your letter of 14 January and
my apologies for the delayed acknowledgement. We shall of course
be glad to supply you with substantive comment on the impact of
the Climate Change Levy. I thought that you might also be interested
to read the enclosed article, published recently in the Environment
Business Magazine. This article makes the points that:
IPPC is designed to control emissions
from the most heavily polluting industrieswhich are not
necessarily the most energy intensive.
IPPC is concerned with pollution,
not primarily with levels of energy use.
It does not distinguish those companies
most exposed to international competition.
The negotiated agreements have made
the system more complicated, not less so.
To which we might add that the emissions trading
scheme is directed at companies producing emissions and not the
non-polluting sectors. Whilst the CCL arrangements may be consistent
with the recently revised EU guidance on the Environmental State
Aid, this is certainly not true in relation to the original guidelines.
These made clear that such State Aid must not be used to "conceal
the true costs of pollution"which of course is precisely
what the CCL does.
You may also wish to know that the CBI, Richard
Jackson, is currently collating industry views on the Levy prior
to a meeting between the CBI Director General, Mr Digby Jones
and the Rt Hon Paul Boateng, Financial Secretary to the Treasury,
planned for 7 February next.
The CBI took over a coordinating role on behalf
of what were then known as the "Second Wave" industries,
ie those industry sectors that did not qualify under the IPPC
criteria for admission to the CCL rebate negotiating process.
And, lastly, may I refer you to comments addressed
by PIFA to Mr Simon Jackson at HM Treasury in respect of the Consultation
document entitled "Green Technology Challenge" published
by HM Treasury in July 2001. A copy is enclosed (not printed).
J R Pugh
23 January 2002