Measures will include capping the carbon price floor (CPF), which
sets rising amounts for the carbon tax paid by electricity generators.
The Government said it was committed to the CPF to stimulate
investment in low carbon infrastructure, but will cap the support rate
at £18 from 2016/17 to 2019/20 to limit any competitive disadvantage
faced by British firms.
The move could save businesses up to £4
billion by 2018/19 and a further £1.5 billion in 2018/19, while shaving
£15 off a typical household energy bill.
Compensation for energy
intensive users for the cost of the CPF and EU emissions trading system
will be extended to 2019/20, while a new compensation scheme will be
Government said a typical energy intensive business in Britain pays
almost 50% more for their electricity than they do in France.
Which? executive director Richard Lloyd said: "A cap on the carbon floor
price is a win for all consumers and something we have long called for
to take some of the pressure off rising energy bills.
needs to be done. So far more than 43,000 people have signed up to our
Fix The Big Six campaign. We are calling for a full competition inquiry
so that hard-pressed consumers can be confident that the market works
well for them, as well as shareholders, and that the price they pay is
Roy Rickhuss, general secretary of steel union Community,
said: "It's good the Government is finally listening. We've been saying
for years that industry needed help to reduce its energy costs and now
the Chancellor, by his announcement today, has admitted the Government
has been getting it wrong.
"Sadly it's too late to save thousands of steel jobs that we've seen disappear in recent years."
Renewable Energy Association chief executive Dr Nina Skorupska said:
"By freezing the carbon price floor, the Chancellor is rowing back on
his own policy and once again moving the goalposts for investors in
"Government must explain how investment in
renewables is protected from the freeze, or risk undermining the
investment required to replace ageing coal power stations with
technologies that can keep the lights on without damaging the climate."