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Budget 2002 - the Co-operative Bank's viewpoint
by Jon Lee,
Ecological Business Development Manager,
Co-operative Bank

A number of helpful changes arose from the chancellor's budget from the bank's point of view. Given our commitment to encouraging investment in sustainable equipment and processes, we particularly welcomed the widening of energy-efficient technologies eligible for enhanced capital allowances and the exemption for good-quality CHP from the Climate Change Levy. However, in order to stimulate investment across a wider range of environmentally and socially beneficial technology, it is our view that government needs to consider the use of ECAs for renewable energy (e.g. Wind) and waste-recycling equipment if we are to meet tough CO2 reduction and waste recycling targets respectively.

As a provider of asset finance under our preferential Green Lease scheme, the Co-operative Bank has lobbied for some time for the ability for lessors to be able to receive enhanced capital allowances on designated energy-saving equipment. By recycling the benefit of such ECAs to the end user, we believe that this creates a compelling incentive, improving pay back, and stimulating investment. Positive steps for social enterprises and urban regeneration included the 25% tax credit over five years to help with debt or equity funding in addition to a �40M venture capital fund (�20M from government) to underpin tax credits and seek to encourage an entrepreneurial climate in inner cities and run-down council estates. These steps, in addition to the expected Landfill and Aggregates Tax arrangements provide the bank with continued belief in our strategy of seeking to invest in more sustainable business ventures, and to offer preferential terms in such cases, on the basis that such projects represent a lower long-term risk for the bank.