NEXT March, the Government plans to introduce the Climate Change Levy - a new tax on business which will add to costs, hit competitiveness and threaten thousands of jobs.
The Government claims it is an environmental tax. In fact, it will do nothing to help the environment because as British companies are priced out of markets, factories will be exported to countries where environmental standards are far lower - if they exist at all. This Climate Change Levy would hugely damage British manufacturing industry, as the CBI has said. The Government claims that the revenue will be recycled back through cuts in employers' National Insurance Contributions, yet many sectors will be forced to pay out far more in tax than they could possibly receive in compensating cuts in NIC.
The steel industry, for example, may lose about £250 million and gain just £5 million. In fact, one of the few gainers will be the labour-intensive public sector, which is set to receive £150 million more in tax cuts than it loses in tax increases.
Meanwhile, the Government is blocking gas-powered electricity generation which would cut emissions of climate change gases. So the Government's policy on climate change is confused and contradictory.
We believe that the environment should not be used as a cover for increasing the overall tax burden. Neither should the Government hit the productive sectors of the economy while giving the public sector a huge handout.
One of Britain's main problems today is that the public sector is growing fast once again, while the Government is imposing ever-greater costs on industry, especially manufacturing industry.
I and my colleagues will be particularly interested to hear what effect you think this will have on your business. Please send your comments to us via the Conservative Business Liaison Unit at Conservative Central office or by e-mail (cblu@conservative-party.org.uk
FRANCIS MAUDE MP (Shadow Chancellor of the Exchequer), The Conservative Party, Smith Square, London SW1P 3HH.
Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.
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