Budget Statement (UK)

Yesterday 17 November 2022 saw the UK Government make a budget statement. The following are announcements of interest –

(1) Deletion of Retained EU Law (REUL) – a bill is in progress to delete a significant body of law off the statute books by the end of 2023 (I have blog posted about this a number of times already).

The Budget Statement asserts “the government is committed to reforming retained EU law”. The Statement states 5 areas will be reviewed over the next year, comprising “life sciences”, “green industries”, and “ advanced manufacturing” (along with “financial services”, and “digital technology”).

In addition, the government will task Sir Patrick Vallance to advise on how to regulate “emerging technologies”.

(2) Climate Change Levy (CCL) – the rates will be rebalanced, the CCL rate on gas will be raised, and the CCL rate on electricity will be frozen. These steps will take effect in the Finance Bill 2023. The percentage discount on the CCL main rates available through the Climate Change Agreement Scheme will be fixed at 92% for electricity and 77% for LPG. The discounts for gas and solid fuels will be adjusted to 89%.

(3) Carbon Price Support (CPS) – CPS rates in Britain will be kept at a level equivalent to £18 per tonne of carbon dioxide in 2024-2025.

Energy Efficiency Tax Consultation (UK)

Following the announcement of a review of the business energy efficiency tax landscape at the Summer Budget, HM Treasury is consulting (28th September to 9th November) to seek evidence and set out policy proposals to simplify and improve the effectiveness of the energy tax framework.

The review considers business energy policies and regulations, including the Climate Change Levy (CCL), the Carbon Reduction Commitment Energy Efficiency Scheme (CRC), taxes on other fuels – e.g. heating oils, Climate Change Agreements (CCA), mandatory greenhouse gas (GHG) reporting, the Energy Saving Opportunity Scheme (ESOS), Enhanced Capital Allowances (ECAs), and the Electricity Demand Reduction (EDR) pilot.

A first question asks if you agree with the principle of moving away from the current system of overlapping policies towards a system where a single business/organisation faces one tax and one reporting scheme – the consultation asks for the respondent to provide evidence on the level and types of benefits of an approach like this.

The government’s approach is for there to be a single reporting framework.

The consultation asks if you agree mandatory reporting should remain as an important element of the landscape in driving the uptake of low carbon and energy efficiency measures? If not, why not?

Should such reports require board level sign off and should report data be made publicly available? the consultation asks for reasons.

The consultation also asks if governments should develop a single reporting scheme requiring all ESOS participants (and potentially the public sector) to report regularly at board level. If so, what data should be included in such reports.

There is a question about whether such streamlined reports should be required of other larger companies (as defined in the Companies Act) that are not publicly listed.

The proposal is to move towards a single tax by abolishing the CRC and moving the revenue raising element into a single business energy consumption tax based on the CCL. The consultation indicates the government is open to views as to the balance of tax costs across fuels, where proposals can better deliver carbon reduction potential. A series of questions is asked in this area.

A series of questions is asked about the effectiveness of the CCA scheme.

The full consultation is found here.