Government Delays ‘Green Stealth Tax’ Until 2012


The government has delayed the implementation of the CRC scheme after its controversial change last month

The End Of CRC

“Since the launch of the CRC initiative on the 1st of April, very little has actually happened,” said Daniel Lowe, founder and managing director of private data centres owner, UKSolutions. “The CRC has caused much confusion amongst UK businesses and latterly that confusion has moved to anger towards the coalition government’s decision to retain revenue generated from the sale of allowances – seen as a bottom line tax on growth. To many UK businesses, the CRC appears to be yet another tax, with no discernable benefit to the environment.”

“Furthermore, you could argue that the government has finally joined the dots on who the affected organisations will be, the fact that the CRC is aimed at large organisations employing thousands of people and in many cases these are government departments themselves – ironic, one might say,” said Lowe.

“The recent news of a consultation process emphasises the concerns surrounding the initiative and indicates that alarm bells are clearly ringing in the government,” he added. “As it stands, the CRC will not succeed as a solution in reducing the UK’s carbon footprint and these flaws need to be addressed before simply putting into effect a fruitless scheme, which could potentially damage a number of UK businesses in what is still an economically difficult time.”

UK Data Centre Impact

“Based on initial cap-and-trade estimates, the cost of the CRC will add between five and 7.5 percent to the cost of operating a UK data centre,” Lowe warned. “This will undoubtedly impact the competitiveness of UK data centres; although not the return to ‘mud huts’ proposed by some industry pundits.”

“This is not to say that the CRC has no place in the market, of course there is a requirement to manage the UK’s carbon production, however, a number of issues need to be addressed in order for both the industry and the UK to prosper both financially and environmentally,” he said.

Poor Legislation

Earlier this year Lowe had said that the CRC was a “pretty poor piece of legislation” and that it would actually make it more expensive for some companies to move to a more efficient IT option. He also described it as a tax on the cloud.

This sentiment was echoed by IT services provider 2e2 (formerly Morse) which warned that the CRC laws were flawed, as it did not take into account companies simply moving their data centres offshore and it didn’t take into account power from renewable sources.

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Author: Tom Jowitt
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