Question

To ask the Secretary of State for Energy and Climate Change, what assessment she has made of the effect of the freezing of the carbon price floor on the Government's projected levy expenditure under the Levy Control Framework to 2020.

DECC published projected levy expenditure under the Levy Control Framework (LCF) as part of its Annual Energy Statement in November 2014:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/371387/43586_Cm_8945_accessible.pdf.

The Office of Budgetary Responsibility (OBR) updated these projections in July 2015 showing forecast spend under the LCF was set to be higher than previously expected:

http://cdn.budgetresponsibility.independent.gov.uk/July-2015-EFO-234224.pdf.

The increase in forecast expenditure was due to changes in wholesale prices, accelerated developments in technological efficiency and higher than expected uptake of demand led schemes. We are aiming to publish an updated set of projections later this year.

The Carbon Price Floor (CPF) is a policy led by HM Treasury. In the 2014 Budget, the Carbon Price Support (CPS), the mechanism by which the carbon price floor is delivered, was capped at £18/tCO₂ until 2018/19. DECC analysis on projected levy expenditure under the Levy Control Framework (LCF) to 2020/21 reflects these rates.