Retailers are “surprised and dismayed” to find that the government has hidden a £1bn-a-year environmental stealth tax in the small print of the Comprehensive Spending Review.
The British Retail Consortium said the government’s green credentials had been called into question after details of the plan became known.
Since Chancellor George Osborne delivered his speech on Wednesday, it has emerged that the money participating businesses put into the Carbon Reduction Commitment energy efficiency scheme will not now be recycled to businesses with good environmental performances. Instead it will go straight to the government.
According to the BRC, because retailers use a lot of property they will be particularly badly hit by the plan.
The CRC was set up at as a revenue-neutral scheme, intended to create incentives for companies to improve their environmental performances. It is currently operating as a data-gathering only exercise but companies are due to put real money into the scheme from April 2011. They were expecting to get money back from October 2011.
Reacting to the government’s plan, BRC director general Stephen Robertson said: “We’re surprised and dismayed that the £1bn per year participating businesses will put in to the CRC scheme is no longer to be recycled to participants but is instead to be pocketed by the Exchequer.
“This is a stealth tax on business which not only goes back on the commitments given in developing the scheme but removes a major source of incentives to reduce carbon emissions…this calls the government’s green credentials into serious question.
“A tax of this size surely merits a mention in the Chancellor’s speech. It’s appalling that the government is sneaking this in, introducing a new burden on businesses that are trying to create new jobs to offset the public sector cutbacks and growing the economy to generate the tax base to pay down the debt.”