PHILIP Hammond is being urged to overturn the decision of predecessor George Osborne and use tomorrow’s budget to reinstate a £1 billion grant for developing new carbon capture and storage (CCS) technology.
Peterhead power station and the White Rose scheme in North Yorkshire were the bidders for the scheme which was scrapped without warning in November 2015, just six months before the government was due to present the award.
Industry figures called the move “devastating” and it effectively brought the projects to an end, and damaged UK plans to cut carbon.
The SNP's Callum McCaig called on the Chancellor to rethink the policy and end the Tory "obsession" with nuclear power.
McCaig said: “Philip Hammond must use this Budget to show that all UK industries have his full confidence – not to prioritise some sectors over others and not just to ferret away a huge pot of money to deal with the bombshell of his party’s hard Tory Brexit and the threat it poses to our economy, rights and living standards.
“The Tories’ energy policy has been confusing and economically damaging for a long time now – through cuts to feed-in-tariffs and government subsidies the Tories have harmed Scotland’s thriving renewables sector while favouring dirty, obsolete nuclear power.
“This obsession with nuclear energy will do nothing to lower energy bills, and will only burden the next generation with unprecedented economic, environmental and security instability and risk while experts back the SNP’s calls for the UK Government to invest more in renewable energy and carbon capture storage.”
The Aberdeen South MP added: “A recent poll by Scottish Renewables found that businesses fear one in six jobs will be lost in the next 12 months which further highlights the negative impact Tory energy policy is having on Scotland’s renewable sector.
“And shamefully the future of Peterhead Power Station has been left hanging in the balance but the Chancellor can and must act now to reverse his predecessor’s decision to scrap the £1bn CCS project.
“It is absolutely appalling that the UK Government would prioritise some industries over others during Brexit negotiations but to class the oil and gas sector as “low priority” is an incredible betrayal.”
Meanwhile, reports indicated that the Chancellor was looking at tax rises for the self-employed to fund expected funding commitments on social care and business rate relief in tomorrow’s statement. To avoid higher borrowing, and breaking manifesto commitments, the Chancellor is considering increasing national insurance class 4 rate contributions, paid by the self-employed, by 3p in the pound, which could raise about £1bn.
Other ways to raise money could come from an increase in alcohol duty while cigarettes would remain at 16.5 per cent of the retail price plus £3.93 on a packet of 20.
It’s both the first and last Spring Budget for this Chancellor, who took over after Osborne was fired last year following the EU referendum vote.
That vote, and the triggering of Article 50, expected now at the end of March, will weigh heavily on the mind of Hammond.
He has made clear he will not use better than expected growth and higher than expected tax returns to splurge, but rather to keep a £60bn Brexit “turbulence” war chest.
“We have over £1.7 trillion worth of debt. We’re spending over £50bn a year just on paying the interest on our debt — that’s more than we spend on defence and overseas aid together. What is being speculated on is whether we might not have borrowed quite as much as we were forecast to borrow,” Hammond told the BBC on Sunday.
The economy has performed better than the Office for Budget Responsibility expected and headline growth forecasts for 2017 are expected to revised from 1.4 per cent to close to 2 per cent. But, the OBR is also expected to warn growth will slow as household finances are squeezed by higher inflation.
The Chancellor is also expected to use the Budget to pledge more infrastructure spending from the £23bn national productivity investment fund.
According to a report, Hammond will establish a £270million “research and development challenge” for business and universities to find ways of boosting mankind’s “ability to operate in extreme environments, developing artificial intelligence and robots that can operate offshore, [or] in space”.
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