EEF says climate tax will harm UK plc

According to the report, 2,300 UK companies would have to pay the levy in full, reducing their ability compete internationally for business.

Martin Temple, the director-general of EEF said his organisation was not opposed to government action on climate change, but believed the levy was one of the ‘most badly designed economic instruments in recent times’.

The reaction of the EEF, followed a similar attack by Digby Jones, the director-general of the CBI, reported by earlier this month, which claimed the tax would be anti-productive and impractical.

In a BBC radio interview Jones said UK business was already struggling to compete against a weak euro and the levy – aimed at reducing carbon dioxide emissions – was ‘inept and would be difficult to implement’.

The CBI has become increasingly critical of the government’s regulatory plans, going so far as to threaten to withdraw its support for the government if it continued to implement what it called ‘inept taxes’ and ‘stifling regulations’.

The government has defended the proposed Climate Change Levy saying it would be revenue-neutral with the money raised being used to reduce national insurance contributions.

The levy, which is to be introduced in April 2002 will tax companies that supply electricity, natural gas, petroleum, coal, lignite, and various forms of coke to various UK industries, but will not apply to domestic or charitable use.

It will be calculated on the number of energy units produced and, unlike VAT, will not be refundable. The government hope to raise £1bn in levy charges from


To read a guide to the Climate Change Levy click here

CBI support for government wavers

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