Guardian Wants To Add 15% VAT To Your Energy Bills
By Paul Homewood
h/t Joe Public
Surely the Guardian, not to mention the EU, would not want to deliberately mislead us?
The UK leads the European Union in giving subsidies to fossil fuels, according to a report from the European commission. It found €12bn (£10.5bn) a year in support for fossil fuels in the UK, significantly more than the €8.3bn spent on renewable energy.
The commission report warned that the total subsidies for coal, oil and gas across the EU remained at the same level as 2008. This is despite both the EU and G20 having long pledged to phase out the subsidies, which hamper the rapid transition to clean energy needed to fight climate change.
Germany provided the biggest energy subsidies, with €27bn for renewable energy, almost three times the €9.5bn given to fossil fuels. Spain and Italy also gave more subsidies to renewable energy than fossil fuels.
But along with the UK, France, the Netherlands, Sweden and Ireland all gave more to fossil fuels. The report is based on 2016 Eurostat data, the latest available, and found that across the EU renewable energy received 45% of subsidies and fossil fuels 33%.
The commission report said policies were being pursued to cut carbon emissions and meet the Paris climate agreement goals of limiting global warming to well below 2C above pre-industrial levels. “However, despite this and the international commitments made in the context of G20 and G7, fossil fuel subsidies in the EU have not decreased,” it said. “EU and national policies might need to be reinforced to phase out such subsidies.”
The total fossil fuel subsidies in the EU were €55bn in 2016, the report concluded. “This is a very high number, given we are reaching the deadline for some of their [phase out] promises,” said Ipek Gencsu, subsidies expert at the Overseas Development Institute (ODI).
A significant part of the UK fossil fuel subsidies identified by the commission is the 5% rate of VAT on domestic gas and electricity, cut from the standard 20%. The UK government did not dispute the data but denied that it provided any subsidies for fossil fuels under its own definition and that of the International Energy Agency.
“We do not subsidise fossil fuels,” a government spokeswoman said. “We’re firmly committed to tackling climate change by using renewables, storage, interconnectors, new nuclear and more to deliver a secure and dynamic energy market at the least possible cost for consumers.”
Shelagh Whitley, also at ODI, was dismissive of the UK government’s claim to provide no fossil fuel subsidies. “They are lying,” she said. “It’s absurd. They are playing games and continuing to prop up a centuries old energy system.”
She said the WTO definition of subsidies, accepted by the UK and 163 other nations, includes “government revenue that is otherwise due, foregone or not collected” such as reduced tax rates. Other countries, such as Germany and Italy, call such tax breaks subsidies, she said and noted the UK also gave tax breaks for oil and gas operators in the North Sea. Whitley said that rather than arguing about definitions, the UK should use its tax system to accelerate the transition to clean energy.
In September, the chancellor, Philip Hammond, said the government had “forgone” billions of pounds by choosing not to implement a scheduled rise in duty on petrol and diesel. “The fuel duty freezes since 2011 have meant that the exchequer has forgone around £46bn in revenues through to 2018-19.” He said the tax not collected was “about twice as much as we spend on all NHS nurses and doctors each year”.
Unfortunately the Guardian has been outed by Tim Worstall:
The European Union has a report out telling us that the UK provides more fossil fuels subsidies than anywhere else. This is nonsense nonsense amounting to a lie. But then when did something like that ever stop The Guardian? Or the EU for that matter:
The UK leads the European Union in giving subsidies to fossil fuels, according to a report from the European commission. It found €12bn (£10.5bn) a year in support for fossil fuels in the UK, significantly more than the €8.3bn spent on renewable energy.
Nonsense. The report is here and the miserable little toerags don’t include the footnotes in it. So you can’t see which reports provide their evidence. Except for the dedicated researcher of course, who will find the report here.
On page 396 of which they tell us that it’s entirely possible that reduced tax rates – say, a lower VAT rate – upon domestic energy consumption shouldn’t be called a subsidy. But what the hell, they drop it in anyway and that’s what entirely drives the UK result. The 5% VAT rate.
But yes, of course, it gets worse. Because that lower rate applies to electricity derived from sunshine, from God’s flatus and so on. Therefore it’s most certainly not a subsidy to fossil fuels, is it?
And that’s it really, that’s all there is. They count what is not a subsidy, and certainly not one to fossil fuels, as a subsidy to fossil fuels.
Or, as we could put it, they’re lying. Good that we’re leaving on 29 March, isn’t it?
This is the section referred to by Tim, from the report by Trinomics on which the EU figures are based:
It is of course an utter nonsense for reduced levels of tax to be counted as subsidies. But even if they were, they are subsidies to consumers for energy, and not subsidies to fossil fuels.
At the last count, reduced VAT on domestic energy bills cost £3.3bn in lost tax revenues.But looking at the list provided by Trinomics, their “ fossil fuel subsidies” also include:
1) Zero VAT on public transport – estimated cost £4.3bn
2) Red diesel – £2.4bn
3) Capacity market – £1.0bn
None of these are subsidies to fossil fuels either. Indeed, capacity market payments should rightly be regarded as a subsidy for renewable energy.
While reduced tax rates may be income foregone for the Exchequer, to get a true figure, you need to compare this with the overall tax take.
The simple reality is that consumption of fossil fuel raises huge amounts in fuel duties, and producers of North Sea oil have also paid tens of billions in extra taxation in recent years, over and above normal Corporation Tax.
How all of that tax revenue can be replaced in the Guardian’s wonderful fossil fuel free future, heaven only knows.
But hiking domestic energy bills with an extra 15% VAT, which the Guardian are so keen on, might be a start!
What constantly amazes me is how there are still so many people out there who actually believe the drivel the Guardian’s writes.
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NOT A LOT OF PEOPLE KNOW THAT 
Grauniad = fake news, which is why so few people read it anymore. It’s just like the BBC, which is why so few people watch or listen to it anymore.
They are both full of lies, bias and propaganda.
The Beeb is your personal soporific, by design you pay for it so watch it, it becomes a habit like smoking, the addiction of liberal programming hits you as much at work where it is the idiots channel of choice because peer pressure is applied to stop channel changers. Well if used to until the haij of 2015 into Europe, the biased reporting during the scottish referendum, its betrayal of David Kelly in 2003, Its cover-up of child abuse in the saville years, reporting 9/11 building 7 as destroyed by an aircraft 20 mins before the NSA used a controlled explosion to demolish it whilst a live camera report showed it still standing behind the journalist. But it took until 2016 for its audience loyalists to realise they were in a minority, and a nasty lying one at that along with its partner in crime C4. these day’s news is shared on facebook or youtube which is why they are censoring both. The beeb is a dead duck without a loyal audience to pander its ‘programming ‘ on.
Kendrick, if you believe the Twin Towers were destroyed by a controlled explosion, and I must apologise in advance for saying this, you are an immensely stupid fool.
WTC 7 was still standing 20 minutes after a live BBC report showing it in Manhattan through the windows where the report of its destruction was being read out on 9/11 it was an entirely separate entity near Wall St, The NSA used it as a data center and possibly considered it to be vulnerable however the building would have had to have been rigged to blow from the date of construction. I said nothing about WTC 1&2 the twin towers.
David Kendrick: That is beyond ridiculous. It was merely a mistake by the BBC. The picture of what was going on was naturally very confused. The whole ‘9/11 was a conspiracy’ is puerile, inane nonsense. That day, the Americans were overtaken by incredible complacency and ineptitude. The conspiracists that pervade any disaster really came out of the woodwork that day!
Youtube BBC Reports 911, WTC Collapse before it happens and GROW UP, personally I dont care what you believe but you are right now in warmist denier mode, AND HAVE IGNORED what was said and inserted what you believed I said. Dont bother me again. Replys are done.
There has been no popular vote on the introduction of VAT or Fuel Duty, the two taxes on poverty, time to abolish any levy without a popular vote, if you want to contribute to a green tax by all means as a consumer it is your right to pay a zero carbon ultra ethical company the real.rate of generation for power whilst burning on your wood stove Venezuelans forests. Leave us out of socialised virtue signalling, I have other ideas for my tax other than funding green socialist mind control.
Why should there have been a vote on introducing VAT or fuel duty? That isn’t how a parliamentary democracy such as ours works.
DK, if you mean they were not introduced by Public Referendum, that is true but it is also true of all UK taxation. They are, however, subjected to a popular vote in the House of Commons EVERY YEAR when a Finance Bill is voted through or not, amended or not.
The problem with representative democracy is that is neither representative or very democratic, what you think of as a fixed stable entity which can happily serve special interests only and ignore the electorate has ended, what on earth did you think was happening, saville and brexit are just part of the process of change.
Have they not noticed that fossil fuels still supply significantly more energy than renewables? If this is taken into account then, allowing the conceit of ‘subsidies’ for fossil fuels, it is still significantly lower for fossil fuels per unit of energy than renewables.
Coal fired power stations pay to turn off in the capacity market, i.e. a negative subsidy;-)
Climate activists and renewables lobbyists are acting like Mad Hatters, twisting language and logic to pursue their agendas. Let there be some common sense injected here.
A subsidy would be when the government takes money that has been taxed, borrowed, or printed, and pays it to some company like Solyndra to do something that the market does not support. Often these subsidies subsidize technologies that do not exist and may never exist (and they say WE ignore the laws of physics.)
In contrast, a tax reduction is NOT a subsidy. A tax credit says an industry gets to keep more of its own money that it has produced selling a product people want and need in the free market.
There is a huge difference between a law that lets you keep more of your own money; and another law that actually gives you someone else’s money. The two are not the same thing. Actually, the oil industry pays higher taxation rates than other industries and subsidizes the government with the billions it pays in taxes, not the other way around.
And then there is the absurd claim above that a lower tax charged to the consumer is somehow a subsidy to the producer. It seems they are angry that people aren’t charged more to heat and light their homes.
You’re completely right Ron. What is depressing is that these claims aren’t ridiculed by the MSM for the stupid and outright lies that they are.
I like to point out that these greenies have heavily subsidised incomes, because they’re not paying the top marginal rate on all of it.
The idea of “tax breaks” for investment also doesn’t work too well for the greenies: such tax treatment merely reflects that the cost of capital equipment is as much as business cost as salaries and wages, or raw materials – but there is a need to recognise that the value that should be attributed as an input should be spread over a longer period, rather than when incurred. Of course, wind farms and solar panels have a high element of depreciation allowances in their tax accounting. They often get real subsidies on top – guaranteed above market prices for their output, or cash handouts to help with the purchase/investment cost.
The VAT accounting forgets that when energy is used by a manufacturer, the end consumer pays the full whack of 20% on the cost unless it is a tax exempt item such as most food. Manufacturers deducting input tax from their tax payments is irrelevant: if the output is taxed at 20%, that is what the consumer pays on the energy and everything else that went to make the product.
Some food is taxed. Perhaps it means that lentils for greens are also subsidised, unless eaten in a restaurant?
That’s not quite right. Taxing one alternative less heavily than the others is a subsidy – which is the WTO’s point. But if the tax on all the alternatives is the same, there is no subsidy, even if the rate is below other rates for other things. It makes no sense to say that food (at zero VAT) is subsidised relative to electricity (at 5% VAT).
It is the same as with the (road) Fuel Duty non-increases in the UK. Budget after Budget, dishonest PMs and Ministers & spokespeople present the non-increase as a tax cut. Even Philip Hammond is not immune. “In September, the chancellor, Philip Hammond, said the government had “forgone” billions of pounds by choosing not to implement a scheduled rise in duty on petrol and diesel.”
The EU wanted the UK to put full-rate VAT on electricity and gas bills way back in the mid-1990s. It was the Chancellor of the Day, Kenneth Clarke, who fought against it and won. A sweet irony there, now that Clarke is a very pro-Remain campaigner (although he does grudgingly accept we are leaving the EU) and his PM was John Major who now wishes to overturn democracy and the EU Referendum result.
Two can play at that game. There is no vat on newspapers, which therefore amounts to a subsidy to the Guardian. Not that it sells many physical copies these days… hang on, I’ll just check…
140,000 ish copies per day
£2.20 cover price
£46,000 ish vat lost per day (@15%)
£14,000,000 ish vat lost per year for 6d * 52wk
So: an annual subsidy to the Guardian of £14 mill. (Does not include the Observer.)
Philip Hammond chose not to implement a tax rise on petrol and diesel? Why is diesel at least 10p more per litre now?
I was supplied an interesting link from 1975 from the Oxford Union debating society, where Heath & co 2 days before the referendum was sucessfully debunked by Peter Shore, the society voted for its choice as always, since its member’s have their careers to think of, Nigel Farage got much worse treatment pre Referendum. Phillip Hammond was in attendence, he was studying at Oxford. Link from Chris Watkin former UKIP Cheshire West and now Conservative for Eddisbury https://www.youtube.com/watch?v=M5ks5tmNwCY its best to read the youtube page comments first where Hammond is pointed out in the audience.
Quite simply they are all Marxists. If an absence of tax is called a subsidy, and potentially everything within a State’s malevolent grasp can be taxed 100% then everything not taxed at 100% is subsidised in marxist illogic. So all food, media, income is subsidised in their totalitarian theology because the individual has nothing except what the State allows him to keep, including his life. Of course Marxism is utter evil garbage but its disciples will kill millions of people in pursuit of it.
Reblogged this on ajmarciniak.
Never mind, when we’re all totally dependent on weather-related electricity supplies and smoky biomass in our glorious green future, all the same lower VAT rate ‘subsidies’ will be supporting them exclusively.
It is a subsidy if one alternative has a lower tax rate that the others (which is the WTO’s point) but not if all the alternatives have the same tax. If 5% VAT is a subsidy then it is a subsidy in renewables as well as gas and coal. And if the plan is to reduce VAT on renewables relative to fossil fuels then that will be a subsidy for renewables.
Really, this is Just beyond dumb reporting.
You can’t expect anything but dumb reporting in the Guardian nowadays, or rather wilfully dumb if it is an environmental issue, because they know what they are doing with that one.
The nail hit on the head by Freudian slip, Parliamentary Democracy doesn’t work, or else we would not vote in the other stupid party every other 4 years. Getting the vote means nothing if it is still minority rule. My Eddisbury MP juet waves at her constituents during the occasional state visit flanked by discrete guards and the local dignitaries, never ever replies to communication. Not even to members of constituency party since they were leave and she was remain. Cant remove the woman and the majority of the electorate never voted for her or her party.
You would not want the same party in all the time, the abuse of power would be horrific. Alternating emotions based on happiness and unhappiness between the old and current party is a natural sine wave in the expression of the electorate.
Elly, 2 party one government is the oldest fraud in the buisness.
David,
1 party is tyranny, 2 parties grow combative, 3 parties fail to accomplish much as all parties disagree and deconstruct what the other parties have completed and it just gets worse from there. How goes the old phrase? Something like: “Democracy is the worst form of government, except for all the others.”.
Except that has only been tried twice, the first time the experiment was ended by Rome invading the Greek city states and the most recent is switzerland, I do so love it when Americans push returning to their republic because of tyrrany of the majority, Jeffersaon said so so it must be true, since he exeprienced so much of it living in a monarchy with limited local government under a parish council and the ubiqetous Governor General. Please people who slander democracy have best have lived in one first, and the Swiss are not on this forum, its a case of I dont like or understand it it so it must be socialism..
It would seem that the current Government is well ahead in the abuse of power these days, new regulations day by day all reducing to naught our ancient Freedoms