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".

Emma Watson has become the latest target of the 4Chan nude hacking scandal
peopleThreats follows actress' speech on feminism and equality at the UN
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
Life and Style
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits