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Government's CRC scheme u-turn stuns industry

21 October 2010 by

The hospitality industry faces a hit of several million pounds after the Government quietly made a significant change to the new CRC Efficiency Scheme in yesterday's Comprehensive Spending Review.

Under the CRC scheme (formerly known as the Carbon Reduction Commitment), companies and public sector bodies that use more than 6,000MWh of electricity a year have to purchase carbon allowances in line with the amount of energy they use each year.

The Government had intended to "recycle" the revenue raised from the sale of allowances to those organisations participating in the scheme, with the best performers receiving all the money they spent on allowances plus a bonus.

"Revenues from allowance sales totalling £1b a year by 2014-15 will be used to support the public finances, including spending on the environment, rather than recycled to participants," it read.

Peter Ducker, chief executive of Carepar, the carbon reduction benchmarking company for hospitality, described the decision as "very disappointing".

"If CRC is perceived as just another tax, rather than an initiative to support carbon reduction, it will justify the cynics' position," he told Caterersearch.

The British Property Federation said the move meant that the CRC was, in effect, a new "stealth tax" and estimated that it would now cost the wider business community almost £3.5b more than it would have.

A spokesman for the Considerate Hoteliers Association agreed that CRC had now taken on the guise of a stealth tax.

"We were told to expect transparency from the new administration," he said. "May we suggest that this is opaque, to say the least, and has shades of ‘a good day to bury further bad news'. Notwithstanding, we hope that in time common sense will prevail and the Government will come to accept that incentives are the best way to encourage greater involvement by industry."

Other key CSR announcements for hospitality:

â- VisitBritain funding cut by 34% in real terms, described by the tourism organisation's chairman as "tough love"
â- An estimated 490,000 public sector jobs will be cut over the next five years. This will have a knock-on effect for hospitality operators that supply the public sector, with PricewaterhouseCoopers expecting the sector to cut around 25,000 jobs as a result
â- The Train to Gain programme, giving employers access to funding for training programmes, will be abolished
â- 75,000 new apprenticeships will be created per year by 2014

VisitBritain gets some ‘tough love' in Comprehensive Spending Review >>

Operators to be ranked by energy performance >>

Energy efficiency - how to save and prosper >>

By Daniel Thomas

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