Energy-intensive industries are to benefit from a £250 million package of measures to protect them against the costs of green policies, the Chancellor announced today.
In a move already
rumoured in the media, Chancellor
George Osborne confirmed in his autumn statement today that he will introduce measures to reduce the impact of
carbon and
energy policies on the most electricity-intensive industries. The measures, worth around £250 million over this Parliament, will be introduced in 2013. Among other things, they will include compensation for some companies from the Government’s
carbon floor price, a policy announced earlier this year by the Chancellor.
Announcing the measures to the House of Commons, Osborne said he was introducing them because he was "worried" about the combined impact of UK and European
green policies on some energy-intensive industries.
"We are not going to save the planet by shutting down our steel mills, aluminium smelters and paper manufacturers. All we will be doing is exporting valuable jobs out of Britain," he told MPs. "So we will help them with the costs of the EU Trading Scheme and the carbon price floor, increase their climate change levy relief and reduce the impact of the Electricity Market Reforms on these businesses too."
In supporting document, the Treasury said it would increase to 90 per cent the level of relief from the climate change levy on electricity for Climate Change Agreement participants. And, as well as compensating them from the cost of the carbon price floor and the EU Emissions Trading System, the Treasury said it would "explore options" for shielding electricity-intensive industries from the costs arising from electricity market reform policies "where this has a significant impact on their competitiveness".
Threat to jobs and business
The move by the Chancellor follows the closure of an aluminium smelter factory this month in the North East by Rio Tinto, which blamed the closure and loss of 515 jobs on
new carbon taxes. Companies such as Tata Steel and Ineos have also warned that UK climate change policies are threatening their operations in the UK and could force them to move abroad. In May, Tata Steel said green taxes were a big factor in its decision to cut up to 1,500 British jobs in Scunthorpe and Teesside.
Answering these concerns, Osborne said his £250 million package would "keep industry and jobs here in Britain". But he denied he was shying away from "supporting sensible steps" to wean Britain off oil or cut its carbon emissions.
"If we burden [energy-intensive businesses] with endless social and environmental goals – however worthy in their own right – then not only will we not achieve those goals, but the businesses will fail, jobs will be lost, and our country will be poorer," he said.
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