Concern over climate levy - African and Balkan work beckons

The Construction Products Association has written to construction minister Nick Raynsford expressing serious concerns over the Government's proposals for the climate change levy which comes into force in April 2001.

CPA president Roy Harrison said that, despite the reduction in the levy rate and the higher rebates available for energy intensive users, "serious problems remain" that "will still prove a major burden on the construction products industry".

Harrison added: "We believe that the Government can achieve its environmental goals without adversely damaging our industry's competitiveness if it adopts the Association's proposals."

The Association is suggesting four key amendments:

l The levy should be revenue neutral so as not to increase the overall tax burden on business, and any future rises should be compensated by reductions in business taxation elsewhere.

l Other industry sectors, apart from the original 10 (which includes the steel, aluminium, cement, glass and ceramic industries), should have the opportunity to enter negotiated agreements. This would encourage energy efficiency improvements in return for a rebate on the levy firms pay.

l The Government must obtain early clearance from Brussels over the principle of rebates to ensure agreements can be reached before the April 2001 deadline.

l An early announcement is needed on financial incentives for the emissions trading scheme to allow businesses to plan ahead.

Harrison urged Raynsford to consider the CPA's proposals, otherwise the prospects for the construction products sector could be "seriously damaged". British construction firms will be able to bid for tenders worth US$450m (approximately £150m) for the redevelopment of Mozambique. The money has been pledged by the international community.

The pledges followed an international conference organised by the United Nations Development Programme, held on 3-4 May, which dealt with reconstructing the devastated south African country.

The money was donated to help repair "infrastructure, restore public services, strengthen public administration, boost the economy and reduce vulnerability to future disasters". Donations included $131m from the US, $60m from the European Union, $44.8m from Britain and $30m from Japan.

An official from British Trade International, the Department of Trade & Industry's agency that promotes export opportunities, said that detailed information on projects was expected in the late summer.

She said that UK construction firms looking for contracts from these oncoming aid programmes, should seek out possible local commercial partners with whom they can made bids. Co-operating with south African companies would shore up the competitiveness of an application for a tender, given their better local knowledge and access to labour and equipment, she said.

Meanwhile, the European Commission has announced that it is to earmark up to Euro5.5bn (£3.3bn) to spend on development work in the western Balkans over the next six years.

The plan includes a large sum of Euro2.3bn for Serbia, which will only be made available if Slobodan Milosovic is removed from power and opposition forces take over the government. It also includes Euro1.1bn for reconstruction in Kosovo.

Commissioner for the budget Michaele Schreyer said: "By including the financing for Serbian assistance in the calculation of the requirements for the western Balkans, the EU is sending out a strong political signal to the democratic opposition in Serbia." Much of the money will be spent on construction projects to aid the local infrastructure, with the aim of boosting the region's economy, which has been hampered by civil conflict.