Email text: informal response to red tape challenge, energy focus, 20/12/11.
Please find attached our input to the energy spotlight of the red tape challenge. As you may be aware, our biggest concern regarding energy and climate change policy is the CRC which in our view commits a number of cardinal sins. As well as dressing up general revenue as environmental taxation, it creates perverse incentives and inflicts significant but unnecessary burdens on business because of its excessively complex and bureaucratic approach. It also demonstrates a fundamental misunderstanding of modern business structures and processes. As a result it makes UK businesses less competitive compared to competitors operating in areas with more relaxed regulatory regimes, and acts as a disincentive to inward investment.
We are particularly concerned that this is at least the fifth time we have responded to a “consultation” in which our main issue of concern is CRC. We responded to Lord Marland last year, we’ve responded to all the CRC consultations and we’re responding to the NAO. In each case, our inputs are well argued, well evidenced and compelling. Moreover we are in line with the rest of industry, not arguing special pleading for a particular sector, just pointing out that the CRC is not fit for purpose. Yet nothing has changed. We are still hopelessly encumbered with CRC which instead of being a pointlessly burdensome and complex regulatory instrument, is now a pointlessly burdensome and complex tax, devoid even of the incentives that it originally possessed as a revenue recycling scheme.
As a result we have to report an unprecedented degree of consultation fatigue among our members who are understandably reluctant to devote further time and resource towards what, by previous experience, will be just another futile exercise. Despite the fact that we provide a collective voice for an industry that contributes 10% of GDP, we cannot predict any positive outcome on this front, because the function of policy making seems to have departed from any kind of logical process. What is the point of repeatedly consulting us if you never take any notice of anything we say?
The current policy instruments being applied to our sector are, frankly, bonkers. No government can possibly justify a climate change policy framework in which the three main pillars of carbon taxation price carbon differently and require different reporting timescales. Until that at least is resolved, it will be impossible to persuade businesses to view UK climate change policy as anything other than a very bad joke.
Worst of all, climate change policy is not a zero sum game. Getting it wrong is extremely damaging and we are already seeing the effects of this in a reluctance among our global players to invest in the UK. While our UK operators struggle to remain competitive, the global operators prefer to devote their energies to identifying locations outside the UK for their future operations. I am more than happy to provide evidence for this if needed.
I attach our input to Lord Marland’s enquiry because it covers the main bases.Please use the material as you see fit and don’t hesitate to contact me should you need further information.
Kind regards
Emma Fryer
Associate Director, Climate Change Programmes
Intellect
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