The government's universally unpopular planned new energy tax, designed to help the UK reduce its greenhouse gas emissions (and coincidentally raising £1.75bn for the Treasury along the way), has once again been criticised by the Confederation of British Industry.
The Prime Minister is said to have now accepted the fact that the energy tax will seriously damage competitiveness, although the £1.75bn cash boost gained from it is still needed by the Treasury to fund its planned cut in National Insurance contributions.
The CBI, along with much of UK business, believes the tax is grossly unbalanced due to the fact that industrial companies will be the biggest losers and labour-intensive firms stand to gain from the NI cuts.
The CBI has already called for the government to introduce reductions of up to 95% to help some companies cope with the new burden, and this new scheme is planned to exempt participating groups from the tax altogether - if the CBI has its way.
The CBI's plan involves the government introducing a trading system, whereby companies will be allocated with specific targets for their emissions. If they better their targets, the 'spare' allocation may be sold to companies struggling to meet their own targets.
"There needs to be a range of measures as an alternative to tax," said Fiona Davies, CBI senior energy adviser.
