Labour is accused of pushing up the bills of households and businesses and then having to subsidise industries for the harm caused by high energy costs
Energy intensive industries which have seen their electricity bills forced up can seek compensation (Image: Graham Young / BirminghamLive)
Nearly £150million has been spent in a single year compensating businesses whose power bills were forced up Britain’s so-called “carbon tax”. Businesses in the country’s paper sector received the highest amount (£50.3million) under the scheme to compensate companies whose electricity bills were made more expensive by the UK Emissions Trading Scheme (ETS).
The situation was denounced as “total madness” by Shadow Energy Secretary Andrew Bowie.
He said: “The Government is choosing to impose a carbon tax that pushes up electricity bills for struggling households and businesses; then it is turning to the taxpayer-funded handouts to subsidise industries that can’t afford to pay their bills. The Conservatives are the only party with a fully funded plan to axe the carbon tax and return to cheap power so that we can lower energy bills for everyone.”
The iron and steel sector received £42million in compensation, more than the £35.7million going to chemicals businesses and the £6.3million paid to “non-ferrous metals” enterprises. A further £12.5million went to businesses in other sectors.
A Government spokesperson said: “Our UK Emissions Trading Scheme drives green investment, creating jobs and growing our economy. The compensation scheme keeps industry competitive alongside reducing our dependence on fossil fuels that leave businesses exposed to price spikes.”
Shadow Energy Secretary Andrew Bowie blasted the ‘madness’ of the policy (Image: PA)
The Tories claim the system of taxing carbon emitted in the UK is a “tax on making things in Britain”. They argue British businesses are put at a disadvantage to rivals in countries where there is no such tax.
Ineos boss Sir Jim Ratcliffe has denounced “carbon taxation” as the “most idiotic tax in the world”, claiming it results in UK-produced goods being replaced with “imported products from places that still burn coal”.
The compensation scheme softens the blow of power-generating operators passing the cost of carbon allowances onto energy-intensive customers. It is intended to reduce the risk that British businesses will move overseas and help them remain competitive.