CBI calls for scrapping of penalties for carbons

System for excessive emissions is now 'discredited' and treated as just a tax

The CBI is calling on the Government to overhaul the penalty system for excessive carbon emissions, branding its handling of the £1bn-a-year carbon reduction scheme as dishonest and "discredited" and demanding that it is scrapped.

The UK's so-called Carbon Reduction Commitment scheme was announced with great fanfare in 2007 and formed the central plank in the Labour government's attempt to clamp down on corporate Co2 emissions.

The scheme was originally intended to persuade Britain's 3,000 biggest carbon emitters, with annual electricity bills of £500,000 upwards, to become more energy efficient by charging them for any emissions generated above a given level.

The proceeds from those penalties, estimated to be about £1bn a year, were to be returned to those companies who had made the biggest strides towards reducing their carbon footprint, providing an incentive for them to become more energy efficient.

However, the CBI and other detractors from the CRC scheme argue that it was in effect killed by the present Government's October 2010 Spending Review. This contained a clause stating that the proceeds from the CRC would no longer be recycled to the greenest companies, but would instead be pocketed by the Government.

John Cridland, the CBI's director general, argued yesterday that the move changed the CRC's status from being an incentive to a tax.

"The Government has snaffled all the receipts, so it's a tax. And if it's a tax, call it a tax. As an incentive scheme, CRC has a huge bureaucracy around it," he said. Mr Cridland said we should scrap the CRC scheme to get rid of the "rigmarole, the regulation, the league tables" surrounding it.

He stressed that the Government should still look to raise about £1bn a year from carbon emissions, but by taxing the companies' energy consumption directly, through an extension of the existing Climate Change Levy. The change should be made in tandem with mandatory carbon reporting, the CBI said.

"The CBI supports the original objective behind the CRC: to secure emissions reductions and promote energy efficiency.... However, removing the recycling element has undermined the scheme."

A spokeswoman for the Department of Energy and Climate Change said: "We have engaged extensively with stakeholders to gather opinion on the CRC. Following on from this, we are looking into how to simplify the scheme and we will publish proposals on this shortly."

The CBI's call to scrap the CRC was part of a broader set of pre-Budget proposals it is announcing today.

These include asking the Government to consider £500m-worth of tax cuts, through measures such as a new capital allowance for various infrastructure projects not already covered by such allowances, making equity raising by small and medium-sized companies tax deductible, and reducing the increase in air passenger duty from its proposed level of 8 per cent to 5 per cent.

Mr Cridland also expressed a degree of optimism about the global economy, saying there "is every prospect that things are beginning to pick up".

PROMOTED VIDEO
Life and Style
techCould new invention save millions in healthcare bills?
Sport
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Voices
A meteor streaks across the sky during the Perseid Meteor Shower at a wind farm near Bogdanci, south of Skopje, Macedonia, in the early hours of 13 August
voicesHagel and Dempsey were pure Hollywood. They only needed Tom Cruise, says Robert Fisk
News
peopleEnglishman managed quintessential Hollywood restaurant Chasen's
Life and Style
food + drinkHarrods launches gourmet food qualification for staff
Arts and Entertainment
Michael Flatley prepares to bid farewell to the West End stage
danceMichael Flatley hits West End for last time alongside Team GB World champion Alice Upcott
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
Horst P Horst mid-fashion shoot in New York, 1949
fashionFar-reaching retrospective to celebrate Horst P Horst's six decades of creativity
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
i100
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Arts and Entertainment
Jamie T plays live in 2007 before going on hiatus from 2010
arts + entsSinger-songwriter will perform on the Festival Republic Stage
Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

C#.NET Server Side Developer (C#, XML, WCF, Unit Testing,SQL)

£30000 - £40000 per annum + benefits+bonus+package: Harrington Starr: C#.NET ...

Junior Database developer (SQL, T-SQL, Excel, SSRS)

£20000 - £30000 per annum + benefits+bonus+package: Harrington Starr: Junior D...

Business Analyst - Banking - London - £550 - £650

£550 - £650 per day: Orgtel: Business Analyst - Traded Credit Risk - Investmen...

Data Centre Engineer - Linux, Redhat, Solaris, SAN, Puppet

£55000 per annum: Harrington Starr: A financial software vendor at the forefro...

Day In a Page

All this talk of an ‘apocalyptic’ threat is simply childish

Robert Fisk: All this talk of an ‘apocalyptic’ threat is simply childish

Chuck Hagel and Martin Dempsey were pure Hollywood. They only needed Tom Cruise
Mafia Dons: is the Camorra in control of the Granite City?

Mafia Dons: is the Camorra in control of the Granite City?

So claims an EU report which points to the Italian Mob’s alleged grip on everything from public works to property
Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Once the poor relation, the awards show now has the top stars and boasts the best drama
What happens to African migrants once they land in Italy during the summer?

What happens to migrants once they land in Italy?

Memphis Barker follows their trail through southern Europe
French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

The ugly causeway is being dismantled, an elegant connection erected in its place. So everyone’s happy, right?
Frank Mugisha: Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked

Frank Mugisha: 'Coming out was a gradual process '

Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked
Radio 1 to hire 'YouTube-famous' vloggers to broadcast online

Radio 1’s new top ten

The ‘vloggers’ signed up to find twentysomething audience
David Abraham: Big ideas for the small screen

David Abraham: Big ideas for the small screen

A blistering attack on US influence on British television has lifted the savvy head of Channel 4 out of the shadows
Florence Knight's perfect picnic: Make the most of summer's last Bank Holiday weekend

Florence Knight's perfect picnic

Polpetto's head chef shares her favourite recipes from Iced Earl Grey tea to baked peaches, mascarpone & brown sugar meringues...
Horst P Horst: The fashion photography genius who inspired Madonna comes to the V&A

Horst P Horst comes to the V&A

The London's museum has delved into its archives to stage a far-reaching retrospective celebrating the photographer's six decades of creativity
Mark Hix recipes: Try our chef's summery soups for a real seasonal refresher

Mark Hix's summery soups

Soup isn’t just about comforting broths and steaming hot bowls...
Tim Sherwood column: 'It started as a three-horse race but turned into the Grand National'

Tim Sherwood column

I would have taken the Crystal Palace job if I’d been offered it soon after my interview... but the whole process dragged on so I had to pull out
Eden Hazard: Young, gifted... not yet perfect

Eden Hazard: Young, gifted... not yet perfect

Eden Hazard admits he is still below the level of Ronaldo and Messi but, after a breakthrough season, is ready to thrill Chelsea’s fans
Tim Howard: I’m an old dog. I don’t get too excited

Tim Howard: I’m an old dog. I don’t get too excited

The Everton and US goalkeeper was such a star at the World Cup that the President phoned to congratulate him... not that he knows what the fuss is all about
Match of the Day at 50: Show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition

Tom Peck on Match of the Day at 50

The show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition