CBI presses for energy tax changes as firms face higher costs

Citation

(2001), "CBI presses for energy tax changes as firms face higher costs", Facilities, Vol. 19 No. 13/14. https://doi.org/10.1108/f.2001.06919mab.005

CBI presses for energy tax changes as firms face higher costs

CBI presses for energy tax changes as firms face higher costsKeywords: Environmental impact, Energy management

Thousands of firms face higher energy bills following introduction of a new energy tax.

The Confederation of British Industry is campaigning for changes to the Climate Change Levy, which aims to reduce industrial emissions. It says ministers should help industry improve the environment by offering discounts to more firms that meet energy reduction targets.

It adds that companies using 40 per cent of the energy in manufacturing are not entitled to a discount even if they want to cut emissions.

Michael Roberts, director of business environment, said: "Business supports the government's environmental objectives, but it is worrying that so many firms are ineligible for discounts.

"The aim of the tax should be to change behaviour, not to raise public funds. Any group of firms that is willing and able to take on a challenging environmental target should get a reduction.

"Nobody should get the idea that discounts are the environmental equivalent of a free lunch. Firms can only get them if they meet tough targets for reducing emissions."

The CBI says the levy will create unnecessary market distortions because some firms qualify for discounts while others do not.

Even companies in the UKs most energy intensive sector, industrial gases, are not eligible and that will have a knock-on effect to other parts of industry.

The CBI warns that different approaches in other European countries mean UK companies will be at a significant disadvantage. It points out that the German government has made all manufacturing companies eligible for a discount.

The CBI adds that the UK's small and medium-size companies will see electricity bills rise by an average 8 per cent and gas bills rise by an average 15 per cent.

Mr Roberts said: "Firms of all sizes will be affected by the levy, including major manufacturers competing in tough international markets and small firms operating on tight margins.

"With signs of a slowdown in the global economy, companies that want to invest will see this as coming at a very bad time."

For further information contact the CBI Tel: +44 (0) 20 7395 8239; E-mail: pressoffice@cbi.org.uk; Web site: http://www.cbi.org.uk