United Kingdom
Brown goes green
Issues
The Government has announced a number of measures to support increased business investment in low carbon growth and declared further commitment to offshore wind and carbon capture projects.
Transport
Further support has been given for low carbon vehicles. A 100 per cent first year allowance will now also be provided for the purchase of electric vans (subject to confirmation of compatibility with EU state aid rules).
In addition, all electric cars and vans will be exempt from the Company Car Tax and Van Benefit Charge for five years. From 2012, the CO2 emissions thresholds for Company Car Tax bands will be shifted downwards and electric cars will be exempted from the benefit in kind applied to company cars.
Climate
The climate change levy, introduced in 2001, applies to industrial and commercial consumers of most carbon fuels. Users in energy intensive sectors are entitled to pay a reduced rate of only 20 per cent of the standard levy.
The Government has announced that from 1 April 2011, the reduced rate will be increased to 35 per cent.
Other
Of particular relevance to residential lettings is the £400 incentive which has been announced to upgrade old inefficient boilers to the latest energy efficient models.
Comments
The Government supports its climate change agenda with a package of policies, arguably, to placate the green voter.
These incentives might appear generous at first glance, but the cost to the Exchequer is a mere £5m per annum and therefore the benefit to taxpayers is very small. This is because the demand for, and availability of, low carbon vehicles is still relatively low. In light of the Copenhagen UN Climate Summit, more decisive measures might have been expected to reinforce the UK’s commitment to the green agenda. For example, an extension to the existing car scrappage scheme to encourage both individuals and businesses to purchase more fuel efficient vehicles would have demonstrated genuine commitment.