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Lord Gilbert: My Lords, I am not familiar with the estimate that my noble friend uses, but I put it to him that the United States bore 80 to 85 per cent of the costs of military operations on its own shoulders. As the whole of Europe has a gross domestic product not far short of that of the United States, it has, by subtraction, accepted only 15 per cent of the total costs. I do not know that the United States has ever said that it will walk away from all reconstruction costs and knowing the generosity of the American people it is unthinkable that it would. Equally, it is clear that this is a European problem and Europe has to make its full contribution.

Lord Cledwyn of Penrhos: My Lords, can my noble friend confirm that the 19 members of NATO are making a contribution?

Lord Gilbert: My Lords, the 19 members of NATO will have been making a contribution to the operational costs according to the formula I gave in my original Answer. Questions of contributions to the reconstruction costs will be for every country to determine for itself in the fullness of time.

28 Jun 1999 : Column 9

Manufacturing Industry: Energy Taxation

3 p.m.

Lord Campbell of Croy asked Her Majesty's Government:

    Whether they intend to temper the impact on manufacturing industry of increases in taxation of energy, or to offer compensation.

Lord McIntosh of Haringey: My Lords, the climate change levy will entail no increase in the overall burden of tax on business since the revenues will be fully recycled via a 0.5 percentage point cut in the main rate of employer national insurance contributions and additional support for schemes aimed at promoting energy efficiency. The Government recognise the need for special consideration to be given to the position of energy-intensive industries under the climate change levy proposals, given their high energy usage and exposure to international competition. The Government intend to set significantly lower rates of the levy for those energy-intensive sectors which agree targets for improving their energy efficiency.

Lord Campbell of Croy: My Lords, I thank the noble Lord for that Answer. As he would expect, I recognise the need to make the reductions in gas emissions which were agreed at Kyoto. However, will the Government carefully consider adjustments to their proposal for a climate change levy, because it would discriminate against firms already hard-pressed by other factors? The starting date is nearly two years ahead. Furthermore, is the noble Lord aware that the proposal to offset the levy by a general reduction in national insurance would penalise firms having small workforces but large energy requirements?

Lord McIntosh of Haringey: My Lords, I am pleased that the noble Lord recognises the urgency and size of the problem which we face if we are to adhere to the Kyoto targets. For exactly the reasons he mentions, we are giving special consideration to the position of energy-intensive industries. We are negotiating with the steel, chemical and aluminium industries, among others, to ascertain what we can achieve in the period available, which is deliberately long, by means of energy reduction targets rather than the full force of a climate change levy.

Lord Brookman: My Lords, I welcome the Minister's remarks, but is he fully aware of the position of some of the major energy users; for example, the steel industry? I am told that it is currently making substantial losses and that if the carbon tax is not satisfactorily modified, it will have additional costs in excess of £300 million. Does he agree that against the backdrop of its current difficulties, that is unacceptable?

Lord McIntosh of Haringey: My Lords, my noble friend knows far more about the steel industry than I will ever know. This is not a carbon tax. If it were, we should have considerable difficulties in calculating the

28 Jun 1999 : Column 10

figures. The figure that my noble friend quotes assumes a rate of levy which has not yet been decided and will not be announced until next year's Budget. It does not assume any results from the negotiations we are now carrying out with the steel industry on emission reduction, which I believe will be successful.

Lord Saatchi: My Lords, why are the Government opposed on these proposals by distinguished environmentalists such as my noble friend Lord Campbell and by representatives of manufacturing industry? Is it not because this is a textbook case of a government mixing their social objective of more "greenness" with their tax objective of more revenue, and ending up satisfying neither?

Lord McIntosh of Haringey: My Lords, I welcome the noble Lord, Lord Saatchi, to his position at the Dispatch Box. I believe that he is wrong. He should recognise that our proposals are precisely those put forward by the noble Lord, Lord Marshall of Knightsbridge, the former president of the CBI, who specifically said that we must have a combination of taxation and traded permits in order to achieve the objectives. This series of proposals has been worked out closely with industry, particularly manufacturing industry.

Lord Dormand of Easington: My Lords, can my noble friend say what effect the increase in energy taxation is having on the British coal industry? I have recently received two letters from the chairman of the country's biggest coal company expressing concern about the issue. Is my noble friend aware--I am sure that he is--that the British coal industry has greatly reduced in size and that some of us believe that it ought to continue?

Lord McIntosh of Haringey: My Lords, again, my noble friend knows far more about the coal industry than I do or ever shall. However, he is making assumptions about the rate of the levy and about our success or otherwise in achieving reductions by agreement. It would be unwise to anticipate either of those points. That is exactly why we set a two-year period for negotiations.

Viscount Eccles: My Lords, I have been employed in the foundry industry--another energy-intensive industry--for many years and I do not recognise the balance to which the Minister referred. Crudely, his proposals appear to raise energy costs by 15 per cent. The national insurance rebate represents 1 to 2 per cent of that. Does the noble Lord agree that a rebate system will provide little comfort to managements which daily seek greater energy efficiency and often achieve it? Does he also agree that a scheme of this kind is bound to lead to job losses and a worsening of the balance of trade?

Lord McIntosh of Haringey: My Lords, the targets which we were set at Kyoto, and which we have set for ourselves, are most demanding. We must reduce carbon

28 Jun 1999 : Column 11

emissions by 1.5 million tonnes a year by 2010. It has been calculated that that involves expenditure of £1.75 billion a year. It is true that the reduction in national insurance contributions will not cover all of that extra expenditure for most energy-intensive industries, but that reduction is intended to cover industry as a whole. It is exactly the point of employment which is the basis of the negotiations we are carrying out in particular with the steel, chemicals and aluminium industries.

Business

3.8 p.m.

Lord Carter: My Lords, at a convenient moment after 4.30 p.m., my noble friend Lord Williams of Mostyn will, with the leave of the House, repeat a Statement being made in another place on Wormwood Scrubs.

Academic and Academic-Related Staff Pay and Conditions Bill [H.L.]

Lord McCarthy: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.

Moved, That the order of commitment be discharged.--(Lord McCarthy.)

On Question, Motion agreed to.

Road Traffic (Vehicle Testing) Bill

Lord Lucas of Chilworth: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.

Moved, That the order of commitment be discharged.--(Lord Lucas of Chilworth.)

On Question, Motion agreed to.

Greater London Authority Bill

3.10 p.m.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.--(Lord Whitty.)

On Question, Motion agreed to.

House in Committee accordingly.

[The CHAIRMAN OF COMMITTEES in the Chair.]

28 Jun 1999 : Column 12

Lord Whitty moved Amendment No. 212A:


Before Clause 67, insert the following new clause--

AMOUNTS FOR DIFFERENT CATEGORIES OF DWELLINGS

(" . In section 30 of the Local Government Finance Act 1992 (amounts for different categories of dwellings) there shall be added at the end--
"(10) Where the major precepting authority in question is the Greater London Authority, subsections (2)(b) and (4) above shall have effect as if the references to sections 43 to 47 below were references to the appropriate Greater London provisions.
(11) In this section, "the appropriate Greater London provisions" means--
(a) sections 70 to 75 of the Greater London Authority Act 1999 and section 47 below; or
(b) in the case of calculations by way of substitute, sections 70, 71 and 73 to 75 of, and Schedule 6 to, that Act and section 47 below."").

The noble Lord said: I hope that I can set a good example by speaking to the amendment with some dispatch. The new clause simply corrects an oversight; it makes no substantive change or change of principle. Section 30 of the Local Government Finance Act 1992 sets out how a billing authority should calculate the council tax for different categories of dwellings. It has to calculate the aggregate of its own tax and that of its major preceptors. The new clause amends Section 30 of the 1992 Act to ensure that where the Greater London Authority is one of the preceptors it refers to the budget requirements and tax setting provisions in the Greater London Authority Act. It will therefore ensure that the amount of tax calculated by the GLA under the provisions of the Bill will be added to council tax bills in London. I beg to move.

On Question, amendment agreed to.


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