Budget 2012: The industry reacts
Expert reaction to today's Budget announcement is mixed, however, it's clear that Mr Osborne's measures are a significantly lighter shade of green than many had been hoping for.
The CRC clean-up promise alluded to this afternoon provides a little joy for energy Budget watchers, but crucially, it also raises fears that the process of change may create even more confusion.
“The Chancellor’s pledge to reduce CRC bureaucracy must not be at the expense of investments in energy savings,” said Aldersgate Group executive director Andrew Raingold. Describing the CRC move as a ‘critical’ step, he added that a more effective regulatory regime would help ensure that businesses reduced both their energy use and bottom line costs.
The Institute of Environmental Management and Assessment (IEMA) stressed the need for clarity to be added to the CRC simplification process: “Businesses will welcome the opportunity to simplify the CRC, but government must ensure that the scheme or any replacement continues to deliver significant carbon reductions. We urgently need a long term, consistent policy framework to provide businesses with the confidence to invest in low carbon and energy efficient improvements.”
The Environmental Services Association’s director of policy, Matthew Farrow commented: “like every business sector we would prefer a simpler CRC. But we must not throw the baby out with the bathwater by forgetting that the focus of the CRC must be to drive decarbonisation of the economy.”
Greenpeace, meanwhile, were in no mood to give the Chancellor any benefit of doubt, on CRC or anything else.
“Today’s budget was the worst for the environment in recent memory,” said executive director John Sauven. “Support for British manufacturing, green jobs and greening the economy should have been the cornerstone of Osborne’s budget. Instead we got a polluters’ charter.”
He also described the Chancellor’s support for airport expansion in the south-east as a ‘carbon-belching U-turn’.
“There was also scant support in today’s budget for the cutting-edge clean tech industries that are spearheading economic recovery in other countries,” he added, “meaning we fall further behind the likes of Germany and miss out on billions in investment and tens of thousands of jobs.”
WWF Scotland’s head of policy Dr Dan Barlow was equally scathing, particularly concerning the news that more North Sea oil and gas extraction will be an energy focus going forward: “We need to be ending our addiction to oil and gas, not supporting more ways to squeeze every last drop from beneath the seabed,” he said.
“However, the Chancellor has just handed the oil and gas industry billions in subsidy that will not only keep them drilling, but allow them to further expand their operations. Having made huge profits from decades of drilling it is perverse that the taxpayer is set to further subsidise this climate wrecking industry which will starve much needed government investment in clean energy alternatives.”
Others, however, saw the Chancellor’s performance as less ‘anti-green’ than in the past.
“Green issues will not make the headlines, of course, but equally those in the renewables and clean tech sector have not heard anything today to overly concern them,” said infrastructure associate with Edinburgh law firm Anderson Strathern Martin Whiteford, , adding that the Chancellor had ‘toned down some of the Government’s more extreme anti-green rhetoric of late’.
On the recognition of renewables ‘crucial role’ in the UK’s energy mix, Mr Whiteford welcomed the support for R&D and University spin-outs – always fertile ground for renewables development. He also pointed out that cutting corporation tax would benefit all businesses, including green businesses.
A comment from the biogas sector, meanwhile, expressed the hope that the new gas generation strategy, due to be announced this autumn, would ‘include renewable gas developments’. The same commentator said that new tax breaks for fossil fuel was a ‘less welcome’ step, particularly when set alongside the proposed cutting/freezing of renewable incentives.
The lack of any new details on the Green Investment Bank, drew the following positive explanation from Grant Thornton’s Nigel Mattravers: “The teams in UKGI are working hard to roll out the GIB and State Aid Clearance is in progress. We are meeting them next week to find out more on progress and wouldn’t have thought there is any need for further political comment at this stage.”