Climate Levy 'Reduction' Welcomed

NI businesses will soon face a £1.5m bill because of a climate change levy, even though they will be paying only a proportion of the full amount.

CBI Northern Ireland Regional Director Nigel Smyth said: "What is going to happen now is that costs will go up by £1-1.5 million. It is a significant achievement to get this," he told the Belfast Telegraph this week.

But it could have been much worse, as the Stormont Energy Minister Arlene Foster (pictured) welcomed what she said is a 'variation' that will reduce the climate change levy charges on gas supplies for NI businesses.

She said that the announcement to replace the climate change levy exemption for supplies of gas in Northern Ireland to a lower rate from 1 April, was made by the Economic Secretary to the Treasury, Justine Greening.

Northern Ireland's current exemption from the Climate Change Levy (CCL) on gas supplies to business and the public sector is due to end on 31 March and the Department of Enterprise, Trade and Investment has been working closely with HM Revenue and Customs and HM Treasury in efforts to reduce the potential CCL burden on local companies.

Ms Foster said: "I welcome that as a result of discussions with Treasury it has been agreed that Northern Ireland companies will pay a reduced rate of CCL from 1 April 2011 up to 31 October 2013.

"The lower rate represents a 65% reduction on the full rate of CCL on gas supplies and should come as a very significant reduction on potential energy costs for business and public sector customers at this difficult economic time.

"Northern Ireland has benefitted from the current exemption from CCL for a full 10 years to allow the fledgling gas industry to grow.

"My Department did seek the European Commission's approval for an extension to the exemption but it was apparent that that application was extremely unlikely to be successful under current State aid guidelines.

"Rather than wait for several more months, during which customers would have to pay the levy, only to then have the application declined, I took the decision to negotiate with HM Treasury on a reduced rate which is at the discretion of the Member State.

"These negotiations have been successful and, with HM Treasury's agreement to a significantly reduced rate of CCL for a further two and half years, I hope that this will offer a significant benefit to local businesses and encourage further energy users to convert to natural gas."

(CD/BMcC)