Climate change levy

The climate change levy has not worked as ministers intended, MPs have concluded.

The levy, which taxes businesses for carbon emissions but gives them a rebate for energy savings, has resulted in carbon savings.

But this was because of financial incentives offered before the levy came into force and improved awareness of energy efficiency, the Commons environmental audit committee said.

MPs said the government would be more effective if it offered businesses incentives rather than penalties for emissions levels.

Ministers had hoped the levy would cut carbon emissions by 20 million tonnes a year by 2010.

Companies can receive an 80 per cent discount on the levy if they meet targets for energy savings.

To help identify savings, the government has funded experts to advise companies on energy efficiency.

politics.co.uk brings you the key quotes and reactions.