INDUSTRY experts believed it is “unlikely” that Jeremy Hunt will toy with the controversial energy windfall taxes when he delivers his Budget on Wednesday.
Previewing the upcoming spring budget, Tim Sarson and Sharon Baynham of KMPG also played down the odds of the UK Chancellor hitting other sectors with levies.
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Energy Voice says the pair noted that recent fiscal interventions have “not raised the tax revenues that the government expected” – primarily due to a drop in energy prices.
Meanwhile, Scottish politicians have urged Westminster to unlock funding for the Acorn carbon-capture and storage project in next week’s Budget.
The Scottish Affairs Committee chastised the government over what it described as “lacking” progress on policies needed to develop CCS and hydrogen technologies – and warned that unless solutions are rolled out at scale the UK would fail to meet its net-zero targets.
Energy Voice states that, in particular, the group was “disappointed with the lack of priority” given to the north-east Acorn CCS project at St Fergus.
Scottish Cluster
Part of the Scottish Cluster scheme – which would see industrial emissions from the central belt routed to the north-east for storage offshore – the north-east initiative aims to store five-six million tonnes of CO2 per year in its first phase, though developers say it could “easily” ramp up 20million tonnes per year.
However, Acorn lost out in the Track 1 CCS sequencing process in late 2021, and instead put on the reserve list.
Former energy minister Greg Hands repeatedly pledged more details on the “Track 2 funding phase by the end of 2022 – though this was delayed to this spring under minister Graham Stuart.
- It is claimed today that Mr Hunt could have £166billion of headroom to cut taxes and invest in the Budget.
The Telegraph says the figure is nine times a previous prediction by the official spending watchdog – underscoring improvements in the economy after booming tax receipts and a sharp fall in energy prices.
The National Institute for Economic and Social Research (Niesr), which conducted the new research, urged the chancellor to use this breathing space to rethink a planned Corporation Tax rise from 19% to 25%.
Mr Hunt has insisted the increase must go ahead, but business leaders and Tory backbenchers fear it will hold back Britain’s recovery.
Niesr’s predictions stand in stark contrast to forecasts by the Office for Budget Responsibility when Mr Hunt produced his Autumn Statement in 2022. Its predictions, in the aftermath of Liz Truss’s disastrous mini-Budget, were used by the chancellor to justify a massive tax raid on workers and business.
Katharine Neiss, chief European economist at PGIM Fixed Income, Prudential Financial’s asset management arm, said: “The bottom line is that growth has come in a lot better than people were expecting.”
But she warned that the UK faces major headwinds in the wake of America’s £310billion package of tax credits and subsidies for green technology companies, which the EU is trying to match.
