The British Glass Manufacturers“ Confederation has joined the growing number of calls to the Government asking it to reform its energy tax, the Climate Change Levy.
The director general of Sheffield…
The British Glass Manufacturers“ Confederation has joined the growing number of calls to the Government asking it to reform its energy tax, the Climate Change Levy. The director general of Sheffield-based British Glass, which represents the majority of the UK“s glass manufacturers, David Workman, said that the levy was penalizing already hard-pressed glass manufacturers. Glass producers use a large amount of gas and companies have seen fuel bills rocket at a time when global, especially European, competition is strong. The region“s producers say they are grappling with the financial demands of the legislation and spending a huge amount of time on paperwork. The levy was introduced in April 2001 as part of the Government“s strategy to reduce the UK“s greenhouse gas emissions by 12% by 2010. Workman said: “We recognize the Government“s commitment to improving energy efficiency and in meeting its Kyoto target. However, there are a number of anomalies in the way that the Climate Change Levy has been implemented that harm the viability of the UK glass industry without producing environmental benefit. This legislation is creating a vast amount of red tape which our members are having to deal with.” The levy taxes companies“ energy use, and partly offsets this through a reduction in employers“ National Insurance contributions. Workman added: “Companies that have entered into the negotiated agreements still bear the burden of the residual 20% tax. This provides no incentive for further energy saving, it is therefore a serious hindrance to investment and UK competitiveness, especially in the EU. “The 20% tax will remove more than GBP 30 million from the glass industry over the next 10 years. The National Insurance reductions will result in a return of only GBP 5 million at present staffing levels. Money from the glass industry is flowing into service industries and public departments.” Both the Confederation of British Industry and Engineering Employers Federation (EEF) have called for the levy to be improved after research found some firms were left with huge bills while others were better off. Worst affected was the manufacturing sector, which the CBI“s report claimed paid out an extra GBP 143 million in the first year of tax. It said manufacturers saw energy costs rise by GBP 328 million but received back only GBP 185 million, with 57% saying they were less competitive as a result. The report conceded that the levy was encouraging changes in energy use in some sectors but called the results “patchy”. CBI director general Digby Jones said: “This survey shows the Climate Change Levy is damaging key sectors of the UK economy and driving jobs abroad. It“s crazy to pile on extra costs when manufacturers are struggling to remain competitive and all employers are bracing themselves for next April“s increase in NI contributions.” The EEF and CBI are calling for no levy increase in the current economic climate, wider access to discounts and more effective targeting of programmes to encourage energy efficiency. The glass industry is a major employer in the region. Key companies include Leeds-based Allied Glass, Rexam in Barnsley, Saint Gobain near Goole, SLI in Doncaster and Beatson Clark in Barnsley.