There was a touch of historical revisionism about David Cameron's proposal yesterday to scrap the Government's climate change levy. The concept of a tax on industry's use of energy is a good idea in principle and Labour deserves credit for introducing it. The Government recognised - long before the Conservatives - that there must be incentives for industry to curb its consumption of fossil fuels if Britain is to meet its targets for tackling global warming.
The Tories were foolish to oppose the introduction of the levy at that time on spurious economic grounds. Their leader's pledge yesterday to replace the levy with something more effective was a clear attempt to explain away the Tories' previous opposition to an important environmental initiative; an attempt to give the impression of continuity in Conservative thinking where none actually exists.
Having said that, the Tories' recent focus on green issues has forced the environment to the top of the political agenda. We should also acknowledge that they have a point about the climate change levy. Good idea as it was at the time, the levy has not delivered the goods. Emissions have not fallen significantly since it was introduced five years ago. And the levy has come to be regarded by industry as just another of the Chancellor's stealth taxes.
Mr Cameron's proposals would improve the scheme. An emphasis on curbing industry's emissions, rather than simply the amount of energy consumed, would make the levy more effective. The additional Tory suggestion yesterday of a broader carbon pricing framework, with tax penalties on heavy polluters and incentives for clean technologies, is also encouraging. If the Government has any sense it will do what it usually does when the Opposition comes up with good ideas: steal them.
But we must remember that reforming the levy and introducing a series of tax incentives is by no means sufficient. Only with statutory annual reductions on emissions for the whole of Britain does the Government stand a chance of significantly reducing our C02 output to meet its target of cutting emissions by 60 per cent by 2050. This is the only framework in which tax schemes such as the climate change levy really can have an effect. Without this unambiguous cross-party commitment to deliver reductions in emissions, all these schemes are, ultimately, little more than tinkering around the edges.Reuse content