Industry to get carbon tax breaks

THE CHANCELLOR is set to unveil a package of tax relief for energy-intensive firms in his autumn statement, after he was criticised for hitting industry with a £3.2bn carbon stealth tax in his last Budget.

City A.M. understands the package will help those firms that use large amounts of energy, such as cement, aluminium and steel makers. A Treasury source confirmed the chancellor was working on a “package for energy-intensive industries”.

John Cridland, the director-general of the CBI, told City A.M. he had been in discussions with the Treasury about exempting some energy-intensive firms from the carbon floor price and was “hopeful” the chancellor would find a resolution.

“If you’re going to do a carbon floor price in the UK then you have to be sensitive who you target. Some business can’t bear the cost and those firms should have been exempted when the chancellor announced a carbon floor price in his Budget. It’s still not too late to exempt them.”

Asked if he thought the chancellor was looking at exemptions for energy intensive firms, Cridland said: “Yes I do. I have been talking to the Treasury about energy-intensive industries at the carbon floor price and I am hopeful we will see a resolution in the autumn statement.”

The chancellor shocked industry when he announced a carbon floor price in his Budget last March, which will raise £3.2bn for the exchequer by 2016.