16 December 2015

  |  CBI Updates Team


Business energy efficiency policy: untangling the knot

The Government’s business energy efficiency tax and policy review is moving in the right direction but there is still work to be done.

Business energy efficiency policy: untangling the knot

The CBI – for most of the last parliament – identified the complexity of the business energy efficiency tax and policy landscape as being a key issue in need of attention from government.  Having developed in increments over time the current framework is littered with complex and overlapping policies and incentives, and as a consequence diverts time and resources towards compliance rather than action.  So we thoroughly welcomed the announcement at the Summer Budget that Treasury would lead a review to simplify the current framework.

The CBI submitted a consultation response to Treasury in the review in which we called for a new approach to reporting where businesses would only be required to report under a single framework rather than the myriad schemes that some often find themselves required to report under.  We called for the tax revenue raised through the Carbon Reduction Commitment (CRC) to be recovered through the Climate Change Levy – enabling the CRC to be scrapped – with the portion of the new CCL rate made up of the CRC declining over time. .  The CBI also pointed to barriers to investment in energy efficiency that could be tackled – such as the disincentive to invest in certain measures which would increase the rateable value of property under the business rate regime.  

Further announcements are expected early in 2016 – and we will continue to make the case for a simplified business energy efficiency landscape.

For more information, contact Ross Gurdin (ross.gurdin@cbi.org.uk)