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Tax on energy providers could hurt

A tax on energy companies that comes into force today will hit consumers and businesses alike, says think tank IPPR.

The Carbon Price Floor, which is intended to encourage low carbon investment, could raise £4.2bn for the Treasury, but will result in a number of negative outcomes say IPPR.

Existing renewables and nuclear power providers will be exempt from the tax, but it is likely increase energy bills for many householders and businesses.

Reg Platt, IPPR Senior Research Fellow said: “Without a proactive and coherent approach to making EU climate policy stronger, the Chancellor’s Carbon Floor Price is not a green tax, it’s just a tax on business and households.

“Green industries offer huge potential for unleashing economic growth and creating jobs but there are far better ways to support them than through this tax. The key test now is whether the Treasury pursues an ambitious EU-wide strategy on climate policy.

The tax will double in each of the next three years and IPPR suggest it will hamper the European Emissions Trading Scheme by putting downward pressures on the price of carbon.

This was posted in Bdaily's Members' News section by Tom Keighley .