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Rishi Sunak should reject proposal to quadruple tax on heating homes

December 3, 2021

The Climate Change Committee (CCC) yesterday published its review of the COP26 conference and the key outcomes of the Glasgow Climate Pact.

It latches on to the agreement’s wording that countries should “phase-out of inefficient fossil fuel subsidies,” recommending that the UK Treasury should increase VAT from 5% to 20% on natural gas for home heating and hot water.

Reduced rates of taxation are a perfectly legitimate means to reduce the cost of living and encourage economic growth. In this sense they are not only “efficient” but compassionate and humane.

They are quite different from the real subsidies consumer have to pay via their energy bills and which are given to wind farm investors and other renewable investors, now costing consumers £10 billion per year.

Since the CCC’s proposal for an increase in taxation on natural gas would be applied to the household bill after the imposition of other climate related levies, the overall effect on the cost of warmth and hot water to households would be severe.

The fuel poverty charity National Energy Action has warned that average domestic energy bills have already soared by over £230 per customer compared to last winter. It warns that the government’s plan to further raise the so-called price cap in April could see the average combined domestic energy bill increase by a further £550 per year.

Dr John Constable, the Net Zero Watch energy editor, said:

It has long been clear that Lord Deben and his Climate Change Committee give too little thought to the cost implications of green policies, but this proposal for a huge increase in the cost of household heating and hot water suggests a degree of indifference bordering on cruelty.

It would also be, of course, politically suicidal. No government would long survive the imposition of this new heating tax.”

Dr Benny Peiser, Net Zero Watch director, said:

The Climate Change Committee’s proposal to quadruple the tax on gas heating is deeply concerning for people across the country, adding insult to injury for millions of families who are already struggling to keep their homes warm this winter.

Rishi Sunak should reject this ill-conceived plan and make every possible effort to reduce the burden of energy costs at this difficult time.”

47 Comments
  1. GeoffB permalink
    December 3, 2021 12:41 pm

    You have to understand the scope of the CCC. It is simply to ensure the climate change act 2008 is implemented. They have no responsibility for any consequences on living standards. If the effects are unacceptable, then it is up to government to repeal or water down the act. The best we can hope for is lowering the target from 100% to say 50%, remember May increased it from 80% to 100% as her final vindictive act without any difficulty, so using the same procedure then it should be doable. 50% would be a lot better than most and if we take advantage of offshoring our heavy industry we must be nearly at 50% now. I think this compromise is the only way that has any chance, but another 2 years of increasing energy costs and inconvenience will be needed to convince the majority that are seduced by the green propaganda. We need more pain and a few riots.

    • Beagle permalink
      December 3, 2021 1:25 pm

      Geoff, but can you regard taxation as a subsidy?

      • Robert Christopher permalink
        December 3, 2021 2:17 pm

        One person’s subsidy is another person’s tax.

        Newton’s Third Law.

      • 3x2 permalink
        December 3, 2021 2:38 pm

        Yes, you have to love the concept that HMG not taking more of your income is a ‘subsidy’.

      • Phoenix44 permalink
        December 3, 2021 4:09 pm

        It is nonsensical to regard a lack of taxation as a subsidy. A subsidy allows a producer to offer a product at below cost. These claims are simply an attempt by Greens to change the meaning of words to let them agitate for what they want.

      • T Walker permalink
        December 3, 2021 5:08 pm

        Yes FF are subsidised the same as childrens’ clothes and food.

        And in the same way that NU Labour thought pensions were subsidised.

    • bobn permalink
      December 3, 2021 1:55 pm

      Correct about needing riots. If you thoughtn the Poll tax was bad – the home energy taxes are pure evil.
      The ‘gilets jaune’ have set a good example – ive bought a yellow vest to be ready for a day on the streets. i think the CCC HQ would be a good place to start – will it burn well?

    • December 3, 2021 4:36 pm

      Yes Geoff, good points.
      Up above Dr. John says that this policy would be “political suicide”.
      Can anyone on here much more clever than I, explain why any politician should worry about shafting their voters, when we have ZERO opposition to these insane policies?

  2. PaulM permalink
    December 3, 2021 12:43 pm

    It’s odd isn’t it, that our overlords always want to fix any perceived “problem” with a new tax?
    (Strange times, if I went into my bank two years ago wearing a mask I would have set off alarms. Yesterday my bank informed me I cannot enter without a mask).

    • Mack permalink
      December 3, 2021 3:47 pm

      Add a sawn off to your funny mask whilst asking for a ‘subsidy’ from the counter staff and I don’t think they’ll be so pleased to see you!

    • Phoenix44 permalink
      December 3, 2021 4:11 pm

      Bureaucrats only have two weapons, tax and bans (regulation or legislation). Yet they believe with just those two tools they can run entire nations to the betterment of all.

    • David Calder permalink
      December 3, 2021 4:12 pm

      I think the bank manager is wrong. There is no law requiring the mask. It is however easier just to say you are exempt than to have THAT discussion. Fake news media is as good at COVID psyop as it is climate. And it is not legal for anyone to ask you on what grounds you are exempt, let alone ask you to ‘prove it’…. I think we need to recognise that this COVID fakery is leading neatly to climate based limitations on freedom. They are linked so resist, NOW.

    • mjr permalink
      December 3, 2021 4:30 pm

      yes you can .. you claim you are exempt. under guidelines you can be exempt if “putting on or wearing a mask causes you anxiety or distress”. you do not have to prove it, or wear a lanyard or show a doctors letter, or even detail what your exception is. and if the bank then refuse access you threaten them with action under disability legislation ; .

  3. Thomas Csrr permalink
    December 3, 2021 12:49 pm

    Difficult to know whether Lord Deben and friends have tin ears from a political point of view or are zealots or so wealthy as to make price considerations irrelevant for themselves. I guess that all three apply. Boris spoke the truth on July 7th 2020 as in ‘Related’ above.

    • December 3, 2021 2:57 pm

      I do wonder how these So called “Principals” can ever in a sane world can acieve their places, None are suitable for any post above alowdown scumbag—if that.

    • J Burns permalink
      December 3, 2021 11:54 pm

      Look up their activities in the register of member’s interests and it all makes sense..

  4. Sobaken permalink
    December 3, 2021 1:14 pm

    What is the current price of gas for consumers per m^3?

    • Beagle permalink
      December 3, 2021 1:36 pm

      Sobaken, I pay £0.43/ m3 at a CV of 39.2 with an additional daily charge of £0.25

      • bluecat57 permalink
        December 3, 2021 1:48 pm

        Thank god I never emigrated to England. I have no clue what that means.

      • Sobaken permalink
        December 3, 2021 5:00 pm

        Doesn’t seem particularly expensive, where I live we pay 6.39 ₽/m^3 which is about 0.065 £/m^3, but our average wages are also 5.5 times lower than in the UK. Meaning that, adjusted for difference in income, gas in Britain is only 20% more expensive in Britain than in Russia. No idea what the calorific value is here, but it should be around 39 MJ too.
        What does “daily charge” mean? Do you have to pay per day simply for having a pipe connection? That would make it a bit more costly I guess.

  5. Eddy Barrows permalink
    December 3, 2021 1:19 pm

    The result of the Bexley by election yesterday where both the Green Party and their Liberal cousins candidates lost their deposits must surely give our carbon dioxide obsessed Prime Minister a very clear message that his increasingly discredited unilateral green policies are a sure and certain way to lose the next election.

    • Tinny permalink
      December 3, 2021 1:41 pm

      Or could it be that the raison d’etre of the Greens has been entirely copied by the Conservatives?

      • bluecat57 permalink
        December 3, 2021 1:46 pm

        CINOs?

      • Harry Passfield permalink
        December 3, 2021 2:59 pm

        I tend to call ’em CHINOs – but I think I shall develop the term, THICKOs.

    • A+man+of+no+rank permalink
      December 3, 2021 3:18 pm

      Crumb of comfort Eddy, Reform party get 6.9% of the vote. Their energy policies are more practical, even though they over-rate influence of CO2.
      https://reformparty.uk/netsmart/

    • Phoenix44 permalink
      December 3, 2021 4:13 pm

      I think the performance of Reform will give them more pause for thought. 7% is not a bad showing at this stage of their life. That’s more than enough to make some MPs in marginal seats squirm uncomfortably. Get it to 10% or more and lots will be squirming.

      But Reform need publicity – note the BBC will still have Greens and LibDems on but not Reform despite the numbers yesterday,

  6. Ian PRSY permalink
    December 3, 2021 1:29 pm

    My council is going to hold a fuel poverty open day next week, whilst pursuing a pplicy of forcing residents 1to switch to ASP heating. You couldn’t make it up!

    • T Walker permalink
      December 3, 2021 5:21 pm

      Yes its called the Miliband concept ( or Syndrome ) – complain about a cost of living problem you created yourself.

      I cannot work our whether Miliband is a thicko (thank you Harry) or totally lacking any self awareness. Of course they are not mutually exclusive.

    • Chaswarnertoo permalink
      December 3, 2021 10:53 pm

      The cognitive dissonance of the leftards.

  7. bluecat57 permalink
    December 3, 2021 1:46 pm

    He should thruple them. That’s the in thing to do.

  8. bobn permalink
    December 3, 2021 1:49 pm

    The Climate Crackpot Commissariat Bullpoo that a lack of tax is a subsidy is an insult to intelligent people.
    On the same illogic I demand that Deben and Co stop receiving income subsidies.
    Since they likely only pay 40% income tax their incomes are being subsidised and so their income taxes should be increased to 100% to phase out ‘inefficient subsidies’.
    On second thoughts -120%

  9. Philip Mulholland permalink
    December 3, 2021 1:57 pm

    The idea that not paying a tax is a subsidy is one of the weirdest pieces of nonsense every produced.

    • December 3, 2021 2:59 pm

      Philip, I went through the four big-ticket “subsidies” for UK fossil fuels at Cliscep here https://cliscep.com/2021/07/24/the-uks-obscene-fossil-fuel-subsidies/

      Of the four “subsidies” of over a billion quid a year, three are actually reduced VAT or duty. The fourth is actually a subsidy (first year capital allowance), but equivalents are available to green schemes as well.

      • Phoenix44 permalink
        December 3, 2021 4:15 pm

        Accelerated depreciation is not a subsidy. A subsidy reduces the price of something, not the tax paid on the profits of something.

      • Mikehig permalink
        December 3, 2021 5:01 pm

        Jit; thanks for linking to that analysis you did – very useful.
        One point with regards to the FYA as applied to the oil business – it has downstream benefits. If I understand it correctly, these tax breaks encourage the development of oil/gas fields that would otherwise be marginal or non-profitable. Thus, unlike the other beneficiaries of these allowances, the govt gets extra tax revenue from the investment in the field (employment taxes, VAT, etc), from the sale of the resultant oil/gas and from the profits of the company. I expect that those consequential revenues outweigh the foregone tax by some margin; then there’s the extra employment as well.

  10. December 3, 2021 2:56 pm

    I believe that Chris Stark, the CEO of the CCC, receives a salary of ~£160k for doing nothing useful. He will need a bigger subsidised salary to pay his fuel bill.

    • December 3, 2021 3:07 pm

      The CCC seems very willing to propose tax rises that won’t affect them. Surely it would be a better approach PR wise to propose instead tax rises that disproportionately affect those in their income bracket. Increasing tax on fuel is pernicious since fuel costs are a larger proportion of the income of worse-off households.

      Stark’s fuel bill might be 1% of his income so if it goes up fifty percent that’s still only 1.5%. For someone on 20k it’s already 5% and a fifty percent increase would raise it to 7.5%.

  11. Diogenese10 permalink
    December 3, 2021 3:36 pm

    They want to stop co2 ? Stop hearing / cooling all government buildings .

    • chriskshaw permalink
      December 3, 2021 4:52 pm

      I like the way you think. Another angle would be to restrict the heating set point to 15C to provide some understanding of what living with a heat pump would be like.

  12. Phoenix44 permalink
    December 3, 2021 4:17 pm

    Why do they still refuse a proper carbon tax then?

    It’s surely not because that would expose the vast majority of supposedly Green technologies and practices as not at all Green surely?

  13. Curious George permalink
    December 3, 2021 4:47 pm

    Taxing a warmth at home? Remember what happened when the government taxed tea, leading to a Boston Tea Party?

  14. It doesn't add up... permalink
    December 3, 2021 5:07 pm

    Did Ed Miliband get the memo?

    • ThinkingScientist permalink
      December 4, 2021 12:47 am

      Both main parties have been dictating policy to energy suppliers for years whilst simultaneously blaming them for price rises. The stupidity and hypocrisy beggars belief.

      Meanwhile I continue to proudly work in an industry that has been keeping the lights and everyone warm for over a hundred years. And mostly on private risked capital.

  15. Cheshire Red permalink
    December 3, 2021 6:52 pm

    In legal circles there’s a well-known phrase;

    ‘If the facts are on your side, pound the facts into the table. If the law is on your side, pound the law into the table. If neither the facts nor the law are on your side, pound the table.’

    The Green Blob is pounding the table. Both the facts and evidence are against them so creating a diversionary fuss is all they have.

    They know wind / renewable energy really does receive huge subsidies, so they refuse to debate on that point as they realise they’ll lose.

    Hence they introduce a false argument in the form of reduced VAT on domestic fuel equals a ‘subsidy’ on FF, when in fact it’s reduced VAT across all domestic fuels (plus a few other applications) and therefore neither a subsidy nor exclusive to FF.

    What naughty scamps the Greens are.

    They achieve this sleight of hand by totting up the VAT element of FF domestic heating and comparing the cost difference between the lower 5% rate and normal 20%. The 15% difference is then held up as ‘proof’ of a fossil fuel subsidy. It’s nothing of the sort, as the cheaper VAT rate applies equally to all domestic fuel sources.

    Its purpose is it gives them something to muddy the water with during media interviews, which is much better than meekly accepting reality.

    To save time there’s also the shorter assessment, which simply put is that they’re lying.

  16. Graeme No.3 permalink
    December 3, 2021 8:33 pm

    Why not a tax on wind farm and solar generation? You could truthfully call it a reduction in subsidies.

  17. Realist permalink
    December 5, 2021 10:46 am

    Where are these imaginary “fossil fuel subsidies”? The taxes levied on them _increase_ prices and are thus the exact opposite of a subsidy.

  18. stevejay permalink
    December 7, 2021 9:29 am

    This fuel tax will force people on low incomes and pensioners to choose between heat or eat. Inflation is causing hardship to many as it is. Is this really an attempt to reduce population figures? Hasn’t Covid already done enough?
    It all goes to show that this so called ‘climate crisis’ is just a scam to frighten people into accepting oppressive measures to combat a problem that has never existed.
    Does this Government actually think that these policies will win votes at the next election?

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