Climate Change Policies Add to Economic Hard Times

by William Yeatman on October 2, 2001

in Blog

Over the last year, industrial gas prices in Great Britain have risen by more than 50 percent, an increase that was kicked off with the governments new climate change levy that increased prices by 7 percent. Rising world prices contributed the remainder of the increase. The climate change levy has also increased the price of coal by 13 percent and electricity by 8 percent (Daily Telegraph, September 28, 2001).

Many businesses are feeling the impacts of the new tax. Carpetmaker Stoddard International has seen its operating profit fall 35 percent in the last half year, which chief executive Alan Lawson attributes in part to the climate change levy. The companys energy costs rose by 250,000 pounds sterling, some as a result of the levy. “The principle is fine but the actual levying of it is penal, especially at a time when we are facing currency costs and threats of cheaper imports from countries which dont have the climate change levy,” said Lawson (The Herald (Glasgow), September 28, 2001).

The Engineering Employers Federation in Great Britain conducted a survey of 550 engineering firms and found that the costs of the climate change levy would exceed 100 million pounds sterling. “Our figures prove that the Government was wrong when saying the levy would not impact on competitiveness because it is imposing an ever greater burden on manufacturing at a time when it is already in recession,” said Martin Temple, EEFs director general (Belfast Telegraph, September 24, 2001).

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