The Chancellor, George Osborne announced yet another ‘carbon tax’ in yesterday’s budget, dubbed the ‘2011 budget for growth’.
This means businesses and consumers can expect higher electricity bills, as carbon-emitting coal and gas-fired plants are taxed £3.2 billion over the next 5 years.
Nuclear and renewable companies should see increased profits, as the tax is applied to the oil and gas generation companies, but will inevitably be passed on to the energy suppliers.
Mr. Osborne said during his budget speech: “The price of oil has risen 35% in just five months”, and “Oil companies are making unexpected profits.”
This was the reasoning behind what he calls a “Fair fuel stabiliser”, announcing that “the supplementary charge levied on oil and gas production will increase from 20% to 32%”.
But business owners may be wondering why, when they have been paying an extra 15 per cent on their fuel bills since 2001 in the form of the Climate Change Levy, more taxation is needed.
Osborne’s ‘carbon floor’
Also announced was a guarantee on the minimum price carbon will be traded at under the EU’s emissions trading scheme.
Carbon will cost at least £16 a tonne in 2013, increasing to £30 by 2020, making the UK the first country in the world to bring in this kind of carbon trading rule.