SBM (Posted 09.07.15)

Summer Budget Responses.

We have received a range of comments and observations from informed experts in response to the Chancellor of the Exchequer, George Osborne’s, first Conservative only Budget in nearly 20-years.

The feedback demonstrates that from a Sustainable Construction perspective there appears to have been little, if any, good news and that a move away from supporting the necessary ‘shift’ towards greater energy efficiency and investment in renewable energy processes has been very clearly signalled.

Does this Government no longer wish the UK to be a true leader in investing in a clean, sustainable future for its energy requirements – and is it preferring to put lower tax before a sustainable future for the planet and the tax payer?

RenewableUK slams Chancellor’s retrogressive budget announcement.

RenewableUK, the trade association representing the wind, wave and tidal energy industries, has strongly criticised the Chancellor’s announcement in his budget speech that he is retrospectively changing the rules governing the Climate Change Levy – a measure which was originally designed to promote the generation of clean energy.

RenewableUK’s Director of Policy, Dr Gordon Edge, said:

“The Chancellor’s announcement that renewable electricity will no longer be exempt from the Climate Change Levy is a punitive measure for the clean energy sector. Until now, Levy Exemption Certificates (LECs) generated as a result of the CCL have provided vital financial support for renewable energy producers.

“The Chancellor says the removal of the exemption will earn the Treasury £450 million in 2015/16, rising to £910 million in 2020/21.

“We’re suddenly looking at a substantial amount of lost income for clean energy companies which was totally unexpected. For example, Levy Exemption Certificates account for just over 6% of onshore wind generators’ revenues.

“The Government had already announced an end to future financial support for onshore wind – even though it’s the most cost-effective form of clean energy we have. Now they’re imposing retrospective cuts on projects already up and running across the entire clean energy sector.

“Yet again the Government is moving the goalposts, pushing some marginal projects from profit into loss. It’s another example of this Government’s unfair, illogical and obsessive attacks on renewables”.

National House Building Council highlights access to finance.

Commenting on measures outlined in the Government’s Summer Budget aimed at boosting levels of house-building, Mike Quinton, Chief Executive of NHBC said:

“NHBC registered 145,174 new homes for development in 2014 across the UK, up 9% on 2013, but with research showing that 245,000 homes are needed every year to meet demand, there is still some way to go.

He added: "We welcome the launch of The Housing Growth Partnership earlier this week, which gives vital financial support to small and medium sized housebuilders. It also helps to increase the supply of new homes that our country so desperately needs.

"Small housebuilders and developers have contributed to UK housing output throughout history. However, in recent years the number of smaller builders have not returned to the market at the same rate following other recoveries. Research by NHBC last year found that access to finance is one of the biggest barriers preventing smaller housebuilders."

More Comment Around The ‘On Shore Wind Levy’

On the matter of the announcement in the budget of that climate change levies are being abolished for onshore wind Phil Grant, a Partner in Baringa’s Energy Advisory Team, who started his energy consulting career in the mid-1990s and has worked with many of Europe’s leading stakeholders in the sector, commented on the afternoon of the budget as follows

“Britain is a world leader in green energy but the abolishment of climate change levies renewables is another blow for an already fragile sector.

Investors were perturbed by recent decisions by DECC to reduce subsidies for new renewable plants and we’ve seen the share prices of companies exposed to renewables take a further hit this afternoon.

Whilst the Chancellor has stated that the removal of the levy benefit is a correction to a legacy scheme, the move has caused further angst for investors who have previously committed billions of pounds in the renewable sector.

We need these investors to commit to further new investment in the sector and today’s news will be less than reassuring for them”

Phil Grant, Partner, Baringa Partners, said:

As a specialist in all aspects of energy economics and investment Phil is well placed to comment on the Chancellor’s announcement.