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Chambers' Climate Challenge Group

As a network, the BCC and 53 Accredited Chambers are united in the importance we give to working to meet the Climate Challenge. We and our members are entirely committed to playing our part in helping the UK meet its targets, both through delivery and policy-making.

As we work towards meeting the climate challenge as a society, we have three core policy principles.

First, this is a revolution that will be delivered through deep and substantial change in which we must all play our part. But it must be a change done in partnership, not forced upon businesses and consumers.

Second, successful change of any type needs to take account of the specific conditions in each sector and every place. Whilst the scale of the challenge is global, the right answers will only be found in local detail. As we look towards the changes we must make, we must be aware of the extremely difficult conditions our businesses face in every part of the UK as they come to terms with the results of the pandemic and the UK’s exit from the EU.

Third, the Climate Challenge will, if handled properly, give UK businesses a strong competitive advantage for the rest of the 21st Century. The journey will be a difficult one, but if we think about this in the right way, then in future, UK businesses will be in the best possible place to compete in an increasingly carbon neutral world.

Drawing on these principles, our policy thinking in this space is evolving all the time, and we will keep these pages updated as we actively develop policies. Our work essentially falls into 3 areas:

  • Government Interventions
  • Infrastructure
  • Business Support

This policy thinking should be considered in light of our wider programme of work, set out in this hub and elsewhere.

Government Interventions

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The Government has a clear role to play as the key leader in this space, and must look at how it can best help, incentivise and support businesses to deliver the change we need without undermining businesses across the UK.

LOW CARBON TECH SUBSIDY – there are two main questions about low carbon technology subsidies: ‘when should they be used?’ and ‘how can they be used?’

On the first, in a narrow range of cases, usually where there is a new and relatively unproven technology, consumers may be hesitant to adopt, there is a case for subsidies which drive take-up in the early stages. These are likely to be where there are significant up-front costs, and future savings are less certain, or only in the longer-term, or where there may be other barriers to take up, such as lack of knowledge.

In those situations, we recommend that subsidies are used, but lessons must be learnt from the past about the damage created where subsidies are ended or made less generous early.

To give businesses confidence where subsidies are used they must follow three key principles:

  • apply a sliding scale intended to reflect market take up, and be very clear about the level of support at key dates;
  • maintain the subsidy levels and dates for the various stages set out at the outset; and
  • be easy to understand and apply.

To give businesses the certainty that these principles will be adhered to, we recommend putting them into legislation (statute) and giving a clear legal right of challenge where they are not being followed.

PROCUREMENTit was reported in December 2018 that government in the UK spends over £280 billion per year buying goods and services from external suppliers. In the 2021 Queen’s Speech the Government confirmed it will introduce a new Procurement Bill which, when it becomes law, will be bulwarked by a National Procurement Policy Statement (‘NPPS’), which will set out strategic national priorities for procurement and the means by which procurement is used to deliver those priorities.

The NPPS will be a key way that Government procurement can be even more optimised towards key economic and social goals, such as supporting innovative SME providers. This is an opportunity to help move businesses towards placing a greater emphasis on meeting the climate challenge.

Our key recommendations are:

  • for new contracts, initially focusing at the higher end and with larger firms, incorporate weightings in procurement metrics (which govern the value of a bid) that provide an additional emphasis on energy efficient and low carbon solutions;
  • find a light-touch way to monitor these weightings and proposals which ensure that SMEs do not suffer a competitive disadvantage to larger businesses;
  • support Government SME contractors and sub-contractors to comply with any new requirements, for example by providing clear accessible guidance, proformas and online training for meeting any new requirements, such as evidencing carbon neutrality.

SUPER DEDUCTION – the BCC welcomed the Government’s decision to create the Super Deduction for companies as a major enticement for firms to invest and grow, helping to boost productivity and the wider economic recovery.

However, too many businesses are currently excluded from the incentive, and we believe it does not do enough to support businesses to meet the climate challenge. To help further support business investment and lift productivity, the Super Deduction should be expanded to include investments in training and explicitly include investments that help a business achieve net-zero emissions. It should also be expanded to include a wider range of business types, such as sole traders.

BUSINESS RATES - in its current form the Business Rates system is broken. It creates a number of perverse incentives for both property improvement and plant and machinery investment. One of these is that businesses are penalised for investing in climate change technology through higher Business Rates bills as the value of their property increases.

We are calling for fundamental reform of the Business Rates system to rebalance many of the harmful incentives it creates, and fixing this problem must be a priority.

Infrastructure

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Delivering the underpinning infrastructure for businesses to move towards Net Zero is a critical role of Government, particularly Energy and Transport, two of the largest contributors to Greenhouse gas emissions in the UK.

ENERGY: by some measures, the UK’s energy supply contributes around a quarter of its total emissions. Government data shows that UK energy production has stabilised recently, following a period of reducing use, so that in 2019 production was around 56% below the 1999 peak. Renewable sources have contributed steadily larger proportions of total UK energy production, reaching around one third in 2019.

Our policies for energy include:

  • publishing a definitive UK energy policy that guarantees the UK’s energy supply and outlines the changing mix of sources over time, giving comfort for possible £multi-billion investments by private parties;
  • work with local Distribution Network Operators (DNOs) to ensure alignment of their plans with the national UK energy policy and mix;
  • review the electricity grid system to ensure that it provides the right scope and incentives for rolling out innovative new battery technologies at scale. Provide specific start-up funding and tailored support through centres of excellence for UK SMEs; and
  • place a requirement on OFGEM and others to ensure that future reviews of the grid incentivise renewable use, zero-carbon storage and network flexibility.

As part of this wide-ranging clarity on long-term energy policy, the Government must provide stability around nuclear, wind energy and other types, as key parts of the supplier matrix.

GREEN TRANSPORTATION FOR BUSINESS – Government data shows that in 2016 transport became the largest emitting sector of Greenhouse Gases in the UK. Whilst energy has fallen significantly as a contributor, transport has stayed relatively static as a proportion. This highlights the need for action on transport.

One plank of this action must be to make public transport a more accessible and effective means for all, giving true ‘Mobility on Demand’ without using higher-polluting forms. Public transport must be funded to become a more coherent framework which helps people get to work and access goods and services in a green way and without them having to compromise.

A second plank must be to reform ticket pricing for public transport by going further than the outcome of the Williams-Shapps Plan and introducing truly flexible fares that work for passengers, whatever their travel needs. While a move towards more flexible fares is a step in the right direction, reforms need to go further. Businesses need access to the widest possible pool of talent to fuel their recovery. That means matching affordable, flexible, travel to the needs of employers and employees.

A third plank must be to reduce the barriers to greater, quicker, take up of electric vehicles. Key actions include Government investment in a truly world-class, fast-charging network across the UK’s road network. The Government must also work with industry and business to ensure equality of access to charging at home, whether through lampposts or new trickle-charge technology, for many people, particularly in terraced properties or flats in towns and cities, this is a real barrier. The Government should also provide a direct financial incentive to companies to make their fleets greener by doubling the period of the maximum capital allowance to two years. Finally, the Cycle to Work scheme, which assists employees with purchasing pedal cycles, should be expanded to self-employed people, minimising the administrative burden of other methods.

Supporting Businesses

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Businesses, particularly Small and Medium Enterprises (‘SMEs’), need detailed guidance and advice on, and practical support to, play their part in meeting the Climate Challenge. There are already some good products in place, but these must be built upon in a coherent manner. In addition to the detailed initiatives above, we ask Government to work around a framework of the key issues that businesses tell us they need, including:

  • Real-world advice tailored to their specific circumstances on the key opportunities and needs which they have in their specific sector and location. Funding additional advisory services through the Accredited Chambers of Commerce network would be a cost-effective way of delivering this shift, and help them deliver content through digital channels;
  • Chamber members are experts in their business areas but are being asked to work on entirely new areas. Funding training to make the additional skills they need available would be highly beneficial for many SMEs;
  • Many SMEs want to play their part, but are unsure of what to look for in new technologies and how to benchmark their performance. Support and guidance on what to look for would assist;
  • Businesses have suffered considerable difficulties through the pandemic, and are now being asked to replace productive equipment with technologies which pollute less, and retrain their staff. To support this, the Government should rollout retrofit funding for businesses, linked to advice; and
  • Innovation by businesses will be a key part of meeting the Climate Challenge, but with the pandemic having shrunk available cash reserves for many there is now an extremely pressing need for funding for taking innovation to the market. This should come in two key ways: comprehensive funding to develop new technologies or methods, to prepare those new technologies for manufacture and to fully commercialise them; and comprehensive funding to take up new technologies and methods. This would build on the existing, piecemeal, approach.