Plans to trim the UK’s budget deficit through a series of public sector cuts and austerity measures have been given a mixed reaction by the British Retail Consortium (BRC).

BRC director general Stephen Robertson said the organisation supported the urgent action announced by Chancellor George Osborne to tackle the deficit, but attacked the government’s plans to pocket the proceeds from a recently introduced green energy scheme.

The Carbon Reduction Commitment Energy Efficiency Scheme was introduced to incentivise companies to pursue greener ways of working, charging them for carbon emissions, but then financially rewarding those who achieved the highest standards of energy efficiency.

But now the Chancellor has announced that the proceeds from the scheme, estimated at up to GBP1bn (US$1.6bn), will not go to the companies involved, but will instead be kept by the Treasury to help boost public finances.

Robertson said he was “surprised and dismayed” at the news. “This is a stealth tax on business which not only goes back on the commitments given in developing the scheme, but removes a major source of incentives to reduce carbon emissions,” he added.

“It is appalling that the Government is sneaking this in, introducing a new burden on businesses that are trying to create new jobs to offset the public sector cutbacks and growing the economy to generate the tax base to pay down the debt.”

However, the BRC said it generally supported the Chancellor’s plans to take urgent action to reduce the UK’s budget deficit with drastic cuts in public services over the next few years.

“These are serious plans to tackle the budget deficit and will remove some of the uncertainty which was driving down consumer confidence,” Robertson said. “Beginning to deal with the deficit now is right.”