Chancellor George Osborne has announced plans in today’s Autumn Statement that could see the average small business having to pay an extra 500 and the average household and extra 6 on energy bills in 2020-21.
New measures outlined in the chancellor’s Spending Review will see firms involved in energy intensive industries, such as the ailing steel industry, become exempt from the costs involved in the Renewables Energy Obligation and the Feed-in Tariff schemes: measures introduced to curtail the country’s reliance on fossil fuels.
It is hoped that exclusion from the schemes will encourage firms involved in energy intensive industries to stay in the UK and remain competitive, whilst saving them a total of 410m a year in tax by 2019-20.
National chairman for the Federation of Small Businesses, John Allan, said: We seek reassurance that the 410m a year of lost tax revenue will not be sought from the less intensive and smaller business in the nergy market.
the FSB recognises the government’s commitment to exempt the steel and chemicals industries from the cost of environmental tariffs, he added.
Previously, the government offered cash compensation to certain companies involved in energy intensive industries.
The Autumn Statement document, released in tandem with Osborne’s speech in parliament, indicates that details on how to implement cost control on both the Renewables Obligation and Feed-in Tariff will be outlined imminently in a published response to the government’s consultations.
The Renewables Obligation requires the UK’s energy suppliers to source increasing proportions of energy from renewable sources, whereas the Feed-in Tariff scheme funds energy consumers who invest in low-carbon energy generation systems for their energy supply, and for the unused energy then exported back to the national grid.