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'Appalling' 1bn pound business stealth tax plan emerges after spending review

20 October 2010

Retailers are 'surprised and dismayed' to find the government has hidden a 1bn pound a year environmental stealth tax in the detail of the Comprehensive Spending Revenue.

Since George Osborne delivered his speech today (Wednesday), 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.

Because they use a lot of property, retailers will be particularly badly hit along with hospitals, universities and local authorities.

The CRC was set up at as a revenue-neutral scheme, intended to create incentives for companies to improve their environmental performances. It is currently operating as a data-gathering only exercise but companies are due to put real money into the scheme from April 2011. They were expecting to get money back from October 2011.

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."



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British Retail Consortium

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