Budget 2014: Manufacturers Shielded Against Green Taxes (Which Will Burden Taxpayers)
Manufacturers have won a number of concessions in the Budget with a £7bn package to cut energy bills that will cap a contentious green tax and shield companies from rising renewable energy subsidy costs.
In a move the chancellor said would create “a Britain that makes things again” and save midsized manufacturers nearly £50,000 a year, a tax on fossil fuels used to generate electricity will be frozen at 2016 rates until the end of the decade.
The tax, known as the “carbon price floor”, was introduced only last year to drive investment in low-carbon energy generators, such as nuclear, solar or wind plants, and had been set to raise more than £2bn by 2018.
Separately, Mr Osborne announced an existing compensation scheme for steelmakers, chemical plants and other heavy electricity users will be extended by four years up to 2020.
A new plan worth almost £1bn will be introduced to protect these companies from rising renewable subsidy costs that the chancellor said would otherwise make up over a third of their energy bills by the end of the decade.
The package represents a major victory for manufacturers who have long argued they are struggling to compete abroad when US industrial energy prices are half those in the UK.