CBI calls for green tax reform and CRC to be scrapped

The Confederation of British Industry (CBI) is calling on the chancellor George Osborne to reduce the burden on businesses by reforming the UK's environmental taxes and ditching the carbon reduction commitment (CRC).

The call comes ahead of the release of next month’s budget on March 21 and advises the chancellor that improving the environmental tax landscape would “send a clear signal to investors that the UK is a profitable place to invest and grow a business”.

In a letter sent to the chancellor today (February 22), CBI director general John Cridland argues that reforming environmentally-related taxes will “promote growth and unlock investment”, adding that businesses see the green economy as an “important opportunity”.

He writes: “Across government, the right policy framework needs to be set to capture these benefits and minimise risks. Environmental taxes have an important role to play not only in supporting the government’s green agenda but also in encouraging business growth and unlocking investment in the UK.

“Business has a number of priorities for environmental taxation, which include the need to ensure that taxes work in a co-ordinated manner, provide the certainty that is essential for business investment and deliver government objectives without unduly harming business competitiveness.”

He also calls for the chancellor to scrap the CRC, which he says “does not deliver an effective and proportionate mix of financial, reputational and reporting drivers”.

Mr Cridland instead suggests Mr Osborne merge it with an expanded climate change levy (CCL) and mandatory carbon reporting (MCR), which he writes would “simplify the policy landscape and reduce the burden on businesses”.

Meanwhile, the letter concludes with a request for an incentive for early adopters of the Green Deal and for more details on how the deal’s energy efficiency scheme will be supported.

Mr Cridland writes: “The CBI believes that some form of incentive will be needed to attract early adopters to the scheme, and therefore welcomes the £200m allocated by HM Treasury in the 2011 Autumn Statement for this purpose. A sensible approach would be to create an incentive similar to the boiler “scrappage” scheme in 2010.”

Carys Matthews

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie