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Green Tax Will Hit Householders And Heavy Industry

A GREEN tax to encourage new wind farms and nuclear power plants could push tens of thousands of households into fuel poverty but do nothing to reduce emissions, a report has warned.

The carbon floor price, announced in Chancellor George Osbornes March Budget, has also come under fire from North-East business leaders who fear it will push running costs far beyond those of rivals in Europe and the Far East, threatening jobs and investment in the regions steel and chemical industry.

Middlesbrough South and East Cleveland Labour MP, Tom Blenkinsop, called for Mr Osborne to heed the concerns of the steel and chemical industry and to modify or revise his proposals.

To be introduced in 2013, the tax is intended to encourage investment in low-carbon energy and raise billions for the Treasury.

Under the existing rules, energy companies must generate a fixed amount of green energy every year, or else buy permits to pollute on the open market.

The new tax kicks-in if the cost of these permits falls too low. From 2013, the floor price of a permit needed to emit a tonne of carbon will be set at £16, rising to £30 by 2020. The higher costs will be passed on to householders and big industrial users. “This will hit the chemical industry especially hard,” said Mr Blenkinsop.

“One UK chemical company Ineos, which has plants on Teesside, has a plant which uses more power than the city of Liverpool.

“The steel industry, too, will be affected. Indeed, when Corus announced redundancies at the Lackenby Beam Mill and Skinningrove, they cited the Carbon Levy as a factor leading to their decision.

“This is especially worrying when we should be making every attempt possible to see that Thai steel company SSI get a head start in their work to restart the Teesside Cast Products plant, and to create many hundreds of much needed jobs for Teesside.”

The Institute for Public Policy Research (IPPR) said that householders, many of whom are already struggling to pay their fuel bills, will also suffer. It estimates that 30,000 to 60,000 more households will be pushed into fuel poverty, defined as spending more than 10 per cent of your disposable income on heat and light.

The think-tank also argued that because the scheme will exist only in Britain, the extra cost will simply drive permits and carbon emissions offshore.

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