Industry fears exodus of firms over taxing climate change levy

NO significant concessions to industry are likely to arise from the lengthy consultation period on the government’s climate change levy, the Institution of Chemical Engineers warned this week. Consultation on the new levy closed at the beginning of the month and enabling legislation is expected to be introduced late this year or early next year. […]

NO significant concessions to industry are likely to arise from the lengthy consultation period on the government’s climate change levy, the Institution of Chemical Engineers warned this week.

Consultation on the new levy closed at the beginning of the month and enabling legislation is expected to be introduced late this year or early next year.

The IChemE said its input and that of other industries had been ignored by the government, with the result that the levy will only succeed in raising tax revenue and industry costs.

IChemE engineering director Malcolm Wilkinson said the legislation was likely to go through largely unchanged, which would result in a migration of manufacturing capacity to less tightly-regulated countries.

`We have been exporting our heavy manufacturing industry to other parts of the world because of our increased costs, and this energy cost is going to accelerate this process,’ Wilkinson said.

It also means the levy will fail in its goal of reducing net CO2 emissions, he added. `All it will do is move companies to where they can do the same but without having to pay an energy tax.’

The IChemE is pushing for a carbon tax rather than an energy tax to be adopted. However, the government is understood to have abandoned this option because of difficulties in calculating bills.

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