Chancellor gives industry £250m to mitigate climate change taxes

THE GOVERNMENT is handing £250m of compensation to energy-intensive companies, as it seeks to offset the impact of billions of pounds worth of new green taxes, the chancellor announced yesterday.

As first revealed in City A.M. last month, George Osborne agreed to hand the compensation to firms who use lots of energy, after they warned a tidal wave of new climate change taxes could force them out of business.

There will be £110m to compensate firms hit by the EU emissions trading scheme; £100m for those hurt by the government’s carbon price floor; and £40m for firms who lose out because of the climate change levy.

John Cridland, the CBI director-general, said: “The Government has recognised that the UK’s energy-intensive users need help. We now need to understand how this money will be allocated to those most at risk.”

But Ed Balls, the shadow chancellor, claimed Osborne had been forced to announce a rebate “to correct the chaos causes by his botched carbon floor price”.

Osborne shocked industry when he unveiled plans to raise £3.2bn with a new carbon floor price, levied in part to help pay for a cut in fuel duty.

Left: how we revealed the story in October