Last week the Chancellor, George Osborne, delivered his budget. There were a number of policies aimed at cutting the “green crap” and assisting UK PLC in controlling spiralling energy costs.
Tax – Extension of the annual investment allowance, which was due to be drastically cut. Until the end of 2015, the allowance will be doubled to £500,000 a year affecting all plant and machinery purchases on or after April 1, 2014.
According to Broomfield & Alexander Director, Leighton Reed, this will encourage businesses to invest heavily in their business and perhaps accelerate their investment plans. The increase in the research and development payable tax credit from April 2014 from 11 per cent to 14.5 per cent for loss-making businesses is a welcome boost but looks relatively meagre in comparison.
Capping the carbon price support rate at £18 a ton of CO2 from 2016 to 2020. It was expected to be closer to £30 by 2020. Roland Vetter, Head of Research at investment firm CF Partners said the move will shave 6.1 pounds per megawatt hour off wholesale electricity prices by 2020, compared to what they would have been if the government had stuck to the previous trajectory.
Combined heat and power plants (CHPs) also seeing an exemption to the carbon price floor for fuels used to produce electricity in CHPs.
The Chancellor announced the UK’s most polluting industries wouldn’t have to pay to support the development of the renewable energy sector – significantly cutting the industry’s energy bills. A decision that could save them £19 billion on energy costs by the end of the decade.