The government chose to freeze the Carbon Tax at 2015 levels until 2020 in last week’s budget in an effort to bring down the cost of energy to UK businesses. Designed to penalise the biggest polluters, McCullagh says the freeze sends out the wrong message when investment is needed in low carbon technology.
“It’s a step backwards in the process of facilitating the transition from fossil fuel-burning energy to cleaner renewable energy options such as wind,” he said.
“It sends totally the wrong message to investors. Given increasing uncertainty worldwide over the security of gas and oil supplies, this will not help us in moving away from a reliance on imported fossil fuels such as coal and LPG, and the additional risks that we carry by continuing to do so.
He added: “It’s vital that the government gives clear direction to investors and sets out a robust, confident plan for tackling both security of supply and climate change issues.
“This backing down over a tax that has only been in place for two years will undermine investor confidence in the sector at a time when renewable energy in Britain needs predictable policy to allow it to continue to grow.”