CRC—the new “carbon tax”? asks Malcolm Dowden
The chancellor announced last week that money raised from the sale of allowances under the CRC Energy Efficiency Scheme will be diverted to the Treasury and “used to support the public finances, rather than recycled to participants”. The announcement marks a radical departure from the scheme which, during extensive consultation, was presented as “revenue neutral” rather than “revenue raising”.
The CBI immediately denounced the change of plan as a “stealth tax”. In fact, there is no stealth. Once implemented, CRC will have all the hallmarks of a tax, reopening the acrimonious debate between landlords and tenants over who should pay.
The announcement is bad news for tenants who have accepted specific obligations to meet the costs of allowances and administration. In many cases, tenant resistance to such clauses has been overcome by amendments promising reimbursement of the whole or a fair proportion of “revenue recycling” payments “received by” or “due to” the landlord. In practice, those amendments were always vulnerable. CRC operates at corporate group level. The CRC participant might be a parent company several rungs up
