Kiran Stacey *Newsflash* Govt changes plans on carbon ‘stealth tax’

Here at the CBI’s climate change summit, most of the anger towards government has centred on the changes to the carbon reduction commitment (CRC), which has seen money originally earmarked for businesses with good environmental performances going to the Treasury instead. The BBC’s Roger Harrabin summed up the feeling in the room when he described it as the government “nicking your CRC dividend”.

So business leaders are relieved to hear Chris Huhne, the energy secretary, make some concessions today. Here’s what he said:

Today we have published a UK-wide consultation on delaying the start of Phase II of CRC. This means that participants won’t need to register for Phase II until 2013.

He added:

Today, I can reveal that we are proposing to exempt over 12,000 information declarers from the scheme.

Phase two is the part of the scheme where carbon allowances are capped and traded. This, for many companies will be the crunch point. Good news then, but it still falls short of the complete reverse many businesses wanted.

This is the reaction from Richard Lambert of the CBI:

The announcement that there will be a consultation and that phase two will be delayed mark the start of winning back those businesses angered by the decision to remove the cash-back incentive.

However, much more needs to be done. It is critical that the CRC becomes an effective tool for encouraging energy efficiency, and not just another tax.