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The government has come under fire for imposing what
has been described as a "green stealth tax" in the spending review.
The accusation followed the announcement by the
Chancellor that funds raised through the new Carbon Reduction
Commitment (CRC) scheme will not now be channeled back to those
participating firms that reduce their emissions by the greatest
amounts.
Instead, the money is to be used to cut the deficit
and to finance environmental projects.
Under the scheme, firms of certain sizes must declare
their energy use and face charges for every tonne of greenhouse gas
they emit.
Businesses that consume more than 6,000 megawatt
hours of energy each year, or the equivalent of a power bill of
£500,000, should have filed their consumption by the end of
September.
As from April 2011, the affected firms need to
purchase a permit - an allowance of £12 -for every tonne of carbon
dioxide they produce.
The purpose of the CRC programme is to promote the
reduction of energy use though financial incentives. Companies that
register the largest reductions were meant to receive rebates if
they reduced emissions, while those with the poorest records would
be hit with the full charge.
It is estimated that some 4,000 private businesses
and public organisations are covered by the new taxes. Smaller firms
are also affected. A further 15,000 organisations are obliged to
join the CRC scheme in the event that they are required to buy
permits at some stage in the future.
However, it now appears, following the spending
review, that businesses will simply pay according to their emissions
and the refunds scrapped, the money to be kept by the Treasury.
Business groups expressed their dismay at changes to
what was intended as a revenue-neutral scheme.
Steve Radley, director of policy at the EEF, said:
"If the private sector is going to play a greater role in increasing
investment and driving growth it needs clarity and stability.
"By changing the rules six months after the game has
started and landing business with an unsignalled £1 billion tax rise
the government has sent an unwelcome signal to business."
Stephen Robertson, director general of the British
Retail Consortium, commented: "We are surprised and dismayed that
the £1 billion per year participating businesses will put in to the
Carbon Reduction Commitment scheme is no longer to be recycled to
participants but is instead to be pocketed by the Exchequer.
"This is a stealth tax on business which not only
goes back on the commitments given in developing the scheme but
removes a major source of incentives to reduce carbon emissions.
"It is appalling that the government is sneaking this
in, introducing a new burden on businesses that are trying to create
new jobs to offset the public sector cutbacks and growing the
economy to generate the tax base to pay down the debt."
Greg Barker, the Climate Change minister, responded:
"This hasn't been done lightly but against the background of the
unprecedented deficit, we've had to allocate proceeds of the CRC to
support public finances, including the environment. The CRC will
continue to drive improvements in energy efficiency in the UK. I now
want to hear from business how we can simplify and improve the
scheme." |
