Blackfriar: Climate change tax decision saps the energy of Drax

The shock news wiped 28 per cent off the North Yorkshire firm and will come as a heavy blow at a time when Drax, once the UK’s worst polluter, is switching to a much greener future burning biomass.

It has already converted two of its six units to burn biomass and plans to bring a third online by 2016.

​Traders pointed to a Goldman Sachs note that said Drax might face a £50m hit to earnings following the Budget decision.

This isn’t the first time the firm has been hit by inconsistent Government policies over climate change and constantly changing promises over rebates.

Shares in Yorkshire’s biggest PLC, York-based housebuilder Persimmon, also took a tumble on the news that buy-to-let mortgage tax relief will be restricted.

​Chancellor George Osborne said that under the current rules, landlords can deduct costs from their profits before they pay tax, giving them an advantage over other home buyers.

Wealthier landlords receive tax relief at 40 per cent and 45 per cent, but this will be restricted to 20 per cent by 2020.

Analysts at City Index said: “The home builders are the weakest performers on the FTSE 100. Although there was no change to council tax valuations, the news that buy-to-let mortgage tax relief would be restricted was enough to send Barratt, Wimpey and Persimmon down. The buy-to-let market is huge, so anything that makes it less attractive could reduce home building down the line.​”

Persimmon’s shares closed down almost five per cent down at 1,876p although there was some hope for the group that first-time buyers could benefit ​from a slowdown in the mortgaged buy-to-let sector.

Lucian Cook, head of residential research at Savills UK: “This is likely to provide some comfort to younger generations of aspiring home owners​.”

Even the news that Sunday trading laws are to be relaxed failed to boost Yorkshire’s second biggest PLC, Bradford-based Morrisons, which closed down 1.5 per cent at 167.4p.

​Under current laws, large stores in England and Wales can open for only six hours on a Sunday. Mr Osborne announced a consultation into giving the decision to local mayors and councils.

​Leeds-based Asda, Britain’s second largest supermarket chain, and Morrisons, the fourth biggest, welcomed the move, although market leader Tesco and Sainsbury’s were less enthusiastic.

​Their attitudes reflect their different strengths in convenience stores, which are not subject to Sunday trading restrictions. Asda and Morrisons have a limited convenience presence, while Tesco and Sainsbury’s have huge convenience estates.

A spokesman for Morrisons said its customers want a relaxation of Sunday hours.

“On Sundays, they can shop online or place a bet at a high street bookie but sometimes they can’t visit their local supermarket,” he said.

Asda CEO Andy Clarke said a rule change was “common sense”.

Another factor in Morrisons’ weakness could be the news of a new compulsory national “living wage” which will increase its salary costs.

Following the Budget, analysts at City Index said: “Give-aways were limited... Banks and home builders seem to be the most disappointed from this Budget.”

Among Yorkshire’s other top 10 PLCs, credit lenders Bradford-based Provident Financial and Leeds-based International Personal Finance were both hit by the news of another surcharge on bank profits.

Neither have any connection to the banking sector, but they were hit by a general malaise among financial stocks.

So while most would say this is a good budget for business, Yorkshire’s top 10 would not agree.