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BusinessWales: Small companies attack `unfair' climate change levy; ENERGY BILLS: Federation says environmental measure is just a stealth tax.

WITH the Earth Summit continuing in South Africa, the Federation of Small Businesses in Wales has branded the new climate change levy a costly failure.

Instead of the Government's claim that the levy would be ``broadly fiscally neutral'', a report by the FSB Wales claims that nearly 90pc of small businesses are net losers under the scheme.

Its study found that small businesses in struggling sectors such as manufacturing, retail and hospitality were hardest hit, with almost half of them not even knowing they were paying it.

The climate change levy - a tax on energy use in industry, commerce, agriculture and the public sector - is meant to be offset by an accompanying cut in employers' national insurance contributions.

However, the FSB says this is not working and wants the levy to be abolished.

``The simple fact is that 88pc of small firms are seeing their energy bills rise by up to 15pc, and they are not getting this back in national insurance contributions,'' said Roland Sherwood, the FSB Welsh policy chairman.

``This research re-emphasises how the climate change levy is a stealth tax that increases the costs of small businesses. And the fact that a whopping 45pc of firms do not know whether they pay the levy, shows how it is ineffectual in changing the way businesses think about environ-mental issues. ``The report also highlights a low level of awareness regarding the environmental objective of the levy and any benefits of, or support for, making the business more energy efficient.

``Small businesses are not antienvironment, but this is an excise duty presented as a measure for the environment.

``If it is necessary to use taxation to reduce energy use, the system should not discriminate against small businesses.''
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Copyright 2002 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Date:Aug 28, 2002
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