The Chancellor has “undermined” the clean energy market by announcing tax breaks for fossil fuels and ignoring green technologies of the future.
That’s the view of environmental groups who criticised George Osborne’s announcement yesterday as a “20th century budget for a 21st century economy”.
David Nussbaum, Chief Executive of WWF-UK said: “This Chancellor’s budget was remarkable in two respects; first in its overlooking one of the strongest-growing sector of the economy, namely the green economy and secondly, in its determination to extend yet more tax breaks to the fossil fuel sector. With the annual growth rate for the green economy standing at around 5%, it’s simply amazing the Chancellor shouldn’t be more vocal in supporting it.
“Handing yet more subsidies to nuclear and tax breaks to fossil fuels – the technologies of yesterday – whilst ignoring the technologies of tomorrow is not the way to do this. The Chancellor seems to be fixated on backing the wrong horses.”
Greenpeace added UK consumers would be affected as shale gas exploration won’t help cut gas prices and as it has in the US. Lawrence Carter, Greenpeace Energy Campaigner said: “The Chancellor is slashing public services with one hand while gifting tax breaks to the fossil fuel industry with the other. This is unfair on struggling households, especially when everyone from the energy regulator Ofgem to BP to the Energy Secretary say UK fracking won’t bring down bills.”
However, Jeremy Nicholson, Director at the Energy Intensive Users Group, disagreed and said George Osborne’s support for shale gas could benefit energy consumers in the UK.
He said: “We are very strong supporters of the UK maximising the commercial benefits of the shale gas resources in the UK – that’s good for the energy industry, it’s good for the Exchequer and it’s potentially good news for energy consumers too, both because of the supply benefits and also the ability to put some downward pressure on gas prices.”
Mr Nicholson added the Chancellor’s announcement to exempt certain energy intensive users from the climate change levy is good news for the industry: “It will help their competitiveness at a time when electricity prices are rising. Also, although the Chancellor announced a savage hike in the cost of the carbon price floor, which will hit all electricity consumers, they’ve also made clear that they intend to compensate electricity intensive industries during 2015/16, which gives long-term certainty for electricity intensive manufacturers.”