Reuters News Service
March 20, 2000
LONDON, March 20 (Reuters) - Just a day before Chancellor of the Exchequer Gordon Brown delivers his fourth budget, a cross-party group of British MPs on Monday dismissed his planned climate change levy as a bad tax. Brown announced the levy last year then, in his pre-budget report in November, watered down its impact in the face of fierce business lobbying, reducing the proposed annual amount raised to 1.0 billion pounds ($1.6 billion) from 1.75 billion pounds and exempting the greenest energy producers.
The tax on industrial energy users will be introduced next month but it is quite possible Brown will tinker with it again on Tuesday.
Parliament's Environment Select Committee said the planned levy did not meet the tests of good taxation. "The system of exemptions, negotiated agreements and reduced rates has produced an extremely complex and cumbersome market instrument which will result in a relatively modest emissions reduction," the committee said in a report.
It was particularly concerned that the levy will hit small- and medium-sized businesses and urged the government to target information and resources at them.
But it welcomed the government's decision to exempt renewable sources and good quality combined heat and power from the levy.
Several groups, including pig farmers and industrial gas manufacturers have complained at being excluded from the rebate scheme. Government sources say Brown may look at that again in his budget to include them.
((Mike Peacock, Parliament newsroom +44 20 7542 7767, fax +44 20 7222 3072, michael.peacock+reuters.com))