There was so little in the budget about the Carbon Reduction Commitment that the Chancellor decided to repeat most of it in three different places.
Here’s what he actually said:
“…the Government will consult on simplifying the Carbon Reduction Commitment (CRC) energy efficiency scheme to reduce administrative burdens on business. Should very significant administrative savings not be deliverable, the Government will bring forward proposals in autumn 2012 to replace CRC revenues with an alternative environmental tax, and will engage with business before then to identify potential options.”
So there’s going to be a consultation (again). We’re already expecting a consultation on phase 2 to be published next Tuesday 27th March, but there will also be proposals brought forward in autumn 2012. At least they will be brought forward if very significant administrative savings are not deliverable. Surely administrative costs will be relatively low going forward; the major investment was in setting up all the systems in the first place. If the eventual decision is to dump CRC and replace the revenues with an alternative environmental tax this will not satisfy demands from Vince Cable, the CBI and the EEF to reduce the tax burden on business. In this centenary year of the Titanic it will merely be a re-arrangement of deckchairs.
The other important thing the Chancellor said relates to the carbon price:
“Allowances sold with respect to 2012–13 emissions will be £12 per tonne of carbon dioxide.”
We knew this was the price for 2011-12; now we have some certainty for next year as well and it’s not at the £16/tonne that some predicted.
Pity he couldn’t give us a 5-year fix!