Hostility to climate change levy grows

11 April 2001
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12 April 2001 | Liam O'Brien

Hostility to the UK's climate change levy is growing among power buyers, who fear that US back-tracking on its green commitments made in 1997 has burdened British industry with an unfair tax that will increase gas and electricity costs by up to 20 per cent.

On 1 April, the UK became the first western industrial nation to introduce the levy, in line with its protocol commitments agreed in Kyoto, Japan four years ago.

"The general assumption has been that a levy will be adopted by other countries, but it is far from clear that this is going to happen," said Jeremy Nicholson, economic adviser to the Energy Intensive Users Group.

Opposition to the levy among small and medium-sized firms is particularly acute because they cannot negotiate levy discounts, unlike large heavy-industry manufacturers that have secured discounts of up to 80 per cent by agreeing to reduce their carbon emissions.

Sam Eadie, managing director of international energy price consultancy Energy Advice, said: "The discontent with the levy is going to rumble on. UK domestic users have complete exemption, unlike in other countries. If the levy were fair, everyone would have to pay."

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