Construction Products Association Sees Climate Change as Pre-Budget Priority

The Construction Products Association (CPA) has called upon the British Government to use this year’s Pre-Budget Statement, and the subsequent Budget next spring, to introduce tax reforms that raise the UK’s contribution towards tackling greenhouse gas emissions whilst safeguarding national competitiveness. Michael Ankers, Chief Executive said: “Last week’s publication of the Stern Report underlines the environmental challenge presented by global warming. The report stresses that the challenge of climate change requires the commitment and effort of all sections of the economy; industry, Government and individuals. We are urging the Treasury to introduce a package of fiscal measures that encourage all parts of the economy to play its part.

“Urgent action is required immediately to improve the energy efficiency of the nation’s homes which generate over a quarter of the UK’s greenhouse gas emissions. We propose that households undertaking improvement to their home should be entitled to a three year discount on the council tax equivalent to their property being dropped by one band.

“A similar temporary council tax reduction applied to new homes built to the high standards set out in the Code for Sustainable Homes would provide a powerful marketing incentive that would encourage house builders to incorporate higher energy efficiency standards in their developments.

“We believe that the existing Climate Change Levy (CCL) should be reformed in order to improve its environmental credentials whilst safeguarding UK competitiveness. In particular the current restrictions on the industry sectors that are eligible to negotiate Climate Change Agreements should be relaxed. This would maximise the number of firms committed to undertaking significant reductions in greenhouse gas emissions in return of a CCL rebate.

“Currently many UK firms are effectively facing double taxation on their energy costs through the CCL and the EU Emissions Trading scheme (EUETS). At a time when sharply higher energy prices are already adding substantially to industries’ costs, this is undermining the competitiveness of operations, whilst providing no additional incentive to improve environmental performance. We propose that energy intensive businesses that are part of the EUETS scheme should receive a 100% CCL rebate, provided that they retain their CCA commitments to reducing their energy use.”

The Association’s Pre-Budget Submission calls for:

• No further increase in the business tax burden.
• Reform of the Climate Change Levy to maximise the take-up of Climate Change Agreements and to avoid the effective double taxation of firms also covered by the EU Emissions Trading Scheme.
• Introduction of temporary council tax reductions to homeowners that can demonstrate that they have substantially improved the energy efficiency of their home by raising its SAP energy-efficiency rating by at least 10 points.
• A similar temporary council tax reduction for new homes built to the high standards set out in the Code for Construction.
• Improve the supply of brownfield sites available for development by allowing owners to offset the upfront costs of cleaning-up contaminated sites against their Corporation Tax liability.