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Centrica's response to the Budget announcement

Mark Hanafin, Managing Director, Centrica Energy, said:

"The Budget presents a mixed picture for the UK energy outlook. We are disappointed by the Government's decision to increase further the already high levels of tax on UK gas and oil production. With more than 50 per cent of Britain's gas now imported, it is vital for our energy security and for the economy that investment is maintained to ensure we extract all of the untapped hydrocarbons we can. This tax hike could have a chilling impact on future investment in the North Sea.

"However, we are pleased by the Government's decision to support the UK carbon price from 2013. It is an important first step in delivering cost effective carbon emission reductions by increasing the cost of high-polluting forms of electricity generation. Crucially, it will provide greater financial certainty for the significant investment decisions being made in the next few years.

"While carbon price support is necessary, it is not sufficient on its own to deliver the scale of investment required to meet the UK's carbon targets and secure energy supplies. It is therefore important that it is seen in the broader context of the forthcoming electricity market reform proposals."

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