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  • UK June 2010 Budget
    The UK Government has announced a range of spending cuts in its revised budget for 2010, and there have been fears that this would hit the renewable energy industry. Here’s the (renewable) energy related changes.

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Industry reactions to the UK Budget - updated

Industry reactions are starting to come in response to the UK June Budget 2010 announced on 22 June.

Here is a selection of responses ticking in to Renewable Energy Focus. If you’d like your view to be added, leave a comment below, or send us an email at press_releases@renewableenergyfocus.com.

Utilyx – questionable commitment to climate change

Chris Bowden, CEO of energy and carbon specialist Utilyx, says:

“Given that this is meant to be the greenest government in years, we have to question where the government’s commitment to climate change was in this Budget.

“While we welcome the introduction of the Green Investment Bank, it is still unclear how this will deliver a new low carbon energy infrastructure or how key schemes such as the Renewable Heat Incentive (RHI) will go ahead.

“Many businesses will also have been looking for some indication of plans to secure Britain’s energy supply over the next five years. With the recovery underway and measures being introduced to encourage business growth, demand for energy can only increase.”

WSP Environment & Energy – welcomes carbon pricing potential and increased landfill tax

Chris Stubbs, Director at global environmental consultancy WSP Environment & Energy, says:

“The Government’s announcement in the Budget that it will ‘support’ the carbon price is to be welcomed, provided that this translates to ‘a sustained increase in’ the carbon price.

“The carbon price has got lost in the ‘noise’ of energy prices fluctuations and has been set so low that it is little more than a minor financial irritation. For many it is largely more of an administrative headache than anything else.

“For years it has been clear that a carbon price of US$50 or even £50 is what’s needed to catalyse serious changes in behaviour and combat emissions, and the Government now has the chance to put this into action.”

Serge Younes, Sustainability Services Director, adds:

“The Government’s plan to increase landfill tax by £8 per tonne each year from April 2011 until at least 2014 is welcome. The whole waste-to-energy (WtE) industry relies heavily on landfill taxation and increased landfill gate fees to improve the economics of installing city-scale WtE plants that provide power and heating to urban communities.

“We hope that a combination of increased taxation and landfill waste and the Green Investment Bank will further stimulate the market and push through some much-needed investment in the construction of additional WtE plants across the country.”

Rozell Energy Services – disappointed

Managing Director at Rozell Energy Services, Connaire McGreevy, says:

“I am really disappointed in the Coalition’s Budget for Renewable Energy and the Low Carbon Economy. The industry is waiting on information or RHI [Renewable Heat Incentive] and we do not know where we stand from the Labour Government’s consultation. Already the new coalition has axed the LCBP [Low Carbon Buildings Programme] and left householders high and dry!”

CBI and Forum for Private Business – positive for small businesses

Richard Lambert, Director-General of CBI, which represents 240,000 businesses in the UK, says:

“The Chancellor has achieved his twin objectives of setting out a credible plan for the public finances and producing a convincing growth strategy for the longer-term.

“The Chancellor has balanced the need for fairness in CGT [capital gains tax] with a recognition of the need to support entrepreneurship and keep the system simple. Raising the entrepreneurs’ relief will help those who create and build small businesses, and maintaining the threshold should avoid hurting small investors in company savings schemes.

“The reduction in the small firms rate of corporation tax to 20% and the extension of the Enterprise Finance Guarantee is to be welcomed.

“We support the Government’s decision to leave the R&D tax credit unchanged until it has undertaken a wide consultation with business. This presents a major opportunity to design a system that will keep the UK competitive for the future.”

CEO of the Forum of Private Business, Phil Orford, adds:

“Not only did the Chancellor make all the right noises about supporting enterprise and smaller businesses, he backed it up with concrete, tangible policies.”

ICE – broadly welcomes Budget

Interim Regional Director of the Institution of Civil Engineers (ICE) South West, Jacki Bell says: “The South West continues to require major investment into its land-based infrastructure if it is to realise its full potential to be the UK's leading low carbon region. This budget appears to support this objective long term. The real impact will only become apparent in the Government's Comprehensive Spending Review in October, however.

ICE president Paul Jowitt welcomes the Budget, in particular its focus on infrastructure and its important role in the UK's development: "Unlocking private investment will be crucial to delivering the infrastructure needed to plug potential energy shortfalls and retain the UK's global competitiveness, so confirmation that strategic body, Infrastructure UK, will remain in place is very good news. This will help reduce political risk and give industry increased confidence to invest, however it must be backed up by a planning system that is fit for purpose.

"The renewed commitment to the creation of a Green Investment Bank and the reassurance that Government will consider a range of options for its scope and structure, is also very encouraging. It is estimated that the UK will need to invest £40-50bn per annum in infrastructure to secure the UK's future economic competitiveness and aid the shift to a low carbon society. Such a bank should operate in a way that reflects the scale of the task at hand - we look forward to assisting the Government on their proposals later in the year.

"The onus is now on industry to demonstrate value for money, both to the client and the public. We look forward to working with Infrastructure-UK on their investigation into reducing the costs of the delivery of major projects.

"We welcome the Government's recognition that under the current energy policy framework, it is difficult for industry to commit to long-term investments in many low carbon technologies.

"However we need to see some stability in the carbon price sooner rather than later to incentivise investment in renewables and nuclear energy."

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