THE manufacturers’ organisation EEF has added its name to the growing list of bodies calling on the chancellor to introduce a package of tax reliefs for companies who are about to be hammered by the government’s £3.2bn stealth tax on carbon.
In a set of demands ahead of George Osborne’s autumn statement next month, the EEF said: “The chancellor must introduce a compensation package which effectively targets those energy-intensive industries most affected by its climate change policies.”
Earlier this month, City A.M. revealed the chancellor was poised to announce such a compensation package in his autumn statement, after intensive lobbying from employers’ organisation the CBI.
The package will focus on those firms that use large amounts of energy, such as cement, aluminium and steel makers.
Osborne came under fierce criticism after he shocked industry by announcing a carbon floor price in his Budget last March, which will raise £3.2bn for the exchequer by 2016. The Treasury will set a minimum price for carbon even if the market price is lower and collect the difference as taxation.
It was labelled a “stealth tax” because the government said it was a green measure while critics argued it was only introduced to help pay for a 1p cut in fuel duty.
Earlier this month, 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.
He added: “I have been talking to the Treasury about energy-intensive industries and the carbon floor price and I am hopeful we will see a resolution in the autumn statement.”