Ernst & Young in green tax row

Engineering Employers Federation delegates were due to call on the Treasury to climb down from its opposition to extend negotiated agreements in place of levy charges to reduce industry’s use of energy.

Confederation of British Industry director general Digby Jones on Tuesday was also expected to call for the government to shift its stance on the CCL in a speech to manufacturers in Birmingham.

The EEF, which commissioned the report, wanted chancellor Gordon Brown to make further reductions in this month’s pre-Budget report. The tax income element from the levy was reduced in last year’s pre-tax budget from £1.75bn to £1bn, and extend eligibility to an 80% discount for energy intensive sectors that sign efficiency agreements.

Brown’s decision to make no changes to the CCL proposals has incensed the EEF, who claim the Treasury had accepted the report findings that industry would be hard hit by its proposals.

The EEF said Treasury officials in September begged them to ‘sit on’ the E&Y report, which raises serious question marks over the present shape of the levy, until the pre-Budget statement. A Treasury spokesman denied knowledge of the report.

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