CIWM would like to use cookies to store information on your computer, to improve our website. One of the cookies we use is essential for parts of the site to operate and has already been set. You may delete and block all cookies from this site, but parts of the site will not work. To find out more about the cookies we use and how to delete them, see our CIWM Privacy Policy.

CIWM
You are here: CIWM  >  Publications  >  Latest News  >  Government To Pocket Money From CRC Scheme

Government To Pocket Money From CRC Scheme

22 October 2010

 Retailers are “surprised and dismayed” to find the Government has hidden a £1bn a year environmental stealth tax in the detail of the Comprehensive Spending Review, according to the British Retail Consortium.

It says that, since George Osborne delivered his speech on the Spending Review, it has emerged that the money participating businesses put into the Carbon Reduction Commitment (CRC) energy efficiency scheme will not now be recycled to businesses with good environmental performances. Instead it will go straight to the Government.

Further reports on the scheme, from BSI Group, provider of standards, management systems, business improvement and regulatory approval information, suggest “urging UK businesses, that have obligations under the Carbon Reduction Commitment Energy Efficiency Scheme, to focus on the potential for savings of around 30 percent through reducing energy costs”. Although BSI recognises the changes to the scheme, and the subsequent impacts to organisations that have already signed up, it suggests, despite changes to the scheme, that “businesses take a systematic approach to energy reduction and so make savings of around 30 percent in their energy use; significant savings for any business in the current financial climate.”

The other major change to the scheme is that first allowance sales for 2011/12 emissions are now planned for 2012 rather than 2011. The BRC explains that companies are expected to start “putting real money into the scheme from April 2011” and were “expecting to get money back from October 2011”. It says that retailers, hospitals, universities and local authorities will be hit badly by the changes because they primarily operate out of large property.

Reacting to the Government’s plan to “seize” that money, British Retail Consortium director general, Stephen Robertson said: “We are surprised and dismayed that the £1bn 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. Coupled with a paring back of the Warm Front scheme for improving the environmental performance of domestic properties, this calls the Government’s green credentials into serious question.

“A tax of this size surely merits a mention in the Chancellor’s speech. 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. Because they use a lot of property, retailers will be particularly hard hit, despite having led the way in tackling climate change.”

Rob Wallis, BSI managing director, EMEA Region comments: “Energy management saves businesses significant amount of money – typically 30 percent of their annual energy bills – so it remains firmly in the interest of UK plc to engage fully with the CRC scheme, especially in what we are told will be more austere times.”

 

Gemma Howard