Rishi Sunak’s Spring Statement to be delivered tomorrow (March 23) offers an opportunity to place a low carbon, green economy firmly on the agenda, according to Capitas Finance, a UK-based specialist in financing energy solutions for carbon-conscious businesses and organisations.
In a statement, Capitas Finance said last year’s Budget did not deliver when it came to encouraging the introduction of green measures and reducing carbon emissions, prompting the company to call on Sunak to connect the Government’s budgetary measures with the UK’s legally binding net-zero target, “something it has so far failed to achieve”.
Jeremy Hartill, chief commercial officer at Capitas Finance, said: “The lack of commitment towards the green economy gave the impression that the UK hadn’t introduced a target to reach net-zero by 2050 or declared a climate emergency.
“As the hosts of COP26, the UK should be leading by example, but it is our belief that the last Budget wasn’t fit for purpose in driving decarbonisation.”
Ahead of the Spring Statement, Capitas has outlined the measures it would like to see introduced by the Chancellor.
- The removal of VAT on a range of clean technologies such as energy storage.
- An increase in the Contracts for Difference budget
- Further promotion of green transport
- The provision of stable, long-term funding options for businesses looking to transition to net-zero and broadening the remit of the UK Infrastructure Bank.
- Introduction of incentives to encourage more small/medium ticket private sector funding into the public sector.
- Super-deduction to be extended and linked to the Energy Technology list.
He said: “Access to finance is often one of the biggest barriers when it comes to change. The Government must act on this as investment in energy-efficient technologies is a necessity in delivering decarbonisation.
“The UK Infrastructure Bank must play a critical role in unlocking private finance for the creation of future-fit and resilient infrastructure across the whole of the UK, meeting local investment needs and driving a productive, sustainable, and inclusive green recovery. By expanding what it can offer, it will ensure that it has climate and environment at its core and full banking powers.”
Phil Murphy, associate director of Capitas Finance, said: “When we are talking to public sector organisations, they are worried about taking risks when it comes to private sector funding given access to alternatives, such as Salix financing or the Public Sector Decarbonisation Scheme (PSDS).
“These schemes have now fallen away significantly, budgets have been cut further but carbon and cost-saving targets have increased. In the face of ageing infrastructure, which is creaking under the pressure, it means smaller and medium-sized projects such as on-site solar generation, LED lighting upgrades and battery storage need to happen sooner rather than later. The government needs to encourage collaboration between public sector entities and private sector funding to plug the gap so we can push forward and achieve our net-zero targets.”
On the expansion of the Super-deduction tax scheme, chief executive Darren Riva said: The Super-deduction tax has served to help businesses decarbonise their operations through energy-efficient plant and machinery assets. But to accelerate the drive to net zero, we need to encourage more organisations to take advantage of the scheme, and also extend the types of technologies that are included. Linking it to the Energy Technology list, much as the Enhanced Capital Allowances were, it would reduce exposure for the Treasury, and drive the right behaviours for businesses.”
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