In an effort to help manufacturing and to militate against energy price rises the Chancellor added measures into the latest budget. A freeze of the carbon floor price, help for energy intensive industries and a much needed acknowledgement of the benefits of CHP.
George Osborne Chancellor of the Exchequer, “A resilient economy is a more balanced economy with more exports, more building, more investment – and more manufacturing too. We’ve got to support our manufacturers if we want to see more growth in our regions. To those who say manufacturing is finished in the West, I say: look at America, which will see up to five million new manufacturing jobs by the end of this decade. I’ll tell you why. US industrial energy prices are half those in Britain. We need to cut our energy costs.
We’re going to do this by investing in new sources of energy: new nuclear power, renewables, and a shale gas revolution. We’re going to do this by promoting energy efficiency.
Today, by tilting the playing field – extending the 2% increase in company car tax in 2017-18 and 2018-19 while increasing the discount for ultra low emission vehicles – and reducing the rate of fuel duty on methanol. But above all we are going to have a £7 billion package to cut energy bills for British manufacturers – with benefits for families and other businesses too.
First, I am capping the Carbon Price Support rate at £18 per ton of CO2 from 2016-17 for the rest of the decade.
This will save a mid-sized manufacturer almost £50,000 on their annual energy bill. And it will save families £15 a year on their bills too – over and above the £50 we’ve already taken off.
Second, I’m extending the existing compensation scheme for energy intensive industries for a further four years to 2019-20.
Our steel makers, chemical plants, paper mills and other heavy energy users make up 35% of our manufacturing exports and employ half a million people. This scheme helps the companies most at risk of leaving to remain in the UK.
Third, I’m introducing new compensation worth almost a billion pounds to protect these energy intensive manufacturers from the rising costs of the Renewable Obligation and the Feed-In Tariffs. Otherwise green levies and taxes will make up over a third of their energy bills by the end of the decade.
Fourth, I am exempting from the carbon price floor the electricity from Combined Heat and Power plants which hundreds of manufacturers use.
And this entire package delivered without any reduction in the investment in renewable energy. Today I have cut the cost of manufacturing in Britain. Half of the firms that will benefit most are in the north of England. A third are in Scotland and Wales. Thousands of good jobs protected.
A more resilient economy. A government on the side of manufacturers. A Britain that makes things again.