SAY NO TO GREEN TAXES

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SAY NO TO GREEN TAXES

 

I’ve been recovering from my annual trip to Chicago – OK, from my annual visits to Rockbottom Brewery, where this year I sampled some six-month matured ale, liked it so much that I had another pint and somehow damaged my hand going back to the hotel.  When the swelling hadn’t gone down a week after my return I went to A & E who promptly put my hand and arm in plaster!  The plaster’s off now but writing is still difficult and so is one-handed typing, which is why I haven’t posted anything for a bit.

 

There was an article in the Times recently by Ross Clark that got me thinking.  It was entitled, “Those hidden taxes clobber the poor hardest”.  It pointed out that the price increases in energy costs are in reality not down to greedy energy companies, which make a profit of around 5%, but more due to “green levies” that the government has forced the energy companies to get us to pay.  Apparently we pay an extra 8% on our bills in order to subsidise wind farms and solar panels.  Ross asks, “Why are those things being funded through our fuel bills rather than out of general taxation?”  I think it more pertinent to ask why they are being funded by taxpayers/energy users at all.  I suspect the answer is as a sweetener to Mr Clegg – although to be fair, whilst Mr Clegg wants the levies, he wants them to be paid out of general taxation.

 

What has traditionally happened with scientific advances is that an inventor has created something, tried it out, discovered that it is too expensive to be exploited commercially, and either refined the product until it is commercially viable or found someone else who is prepared to refine it until it is commercially viable.  That system seems to have stood the country in good stead until the advent of the last Labour government which introduced most of the green levies.

 

The Blair/Brown (or Brown/Ed Milliband, to be more accurate) green levy approach seems to have been for the government to step in at prototype stage and say, “Don’t bother to refine your wind turbines/photovoltaic cells to make them commercially viable.   We are so desperate for green energy, just put the beta vision into production and not only will the State (sorry, energy users) pay you lots of money to insulate you from the need to have a commercially viable product, we will get the energy users to pay you so much that you won’t need to bother ever to create a commercially viable version”.  With all due respect to Mr Clegg (and Mr Brown and Mr Milliband), isn’t it about time someone put a stop to this nonsense?

 

I’m not opposed to green taxes.  But green taxes ought to be designed to influence choice. Most are.  The landfill tax is designed to encourage people to recycle rubbish rather than send it to landfill.  The aggregates levy is designed to encourage businesses to reuse rock, sand and gravel rather than to mine new aggregates.  The Brown/Milliband/Clegg levies are not designed to influence choice.  If you want to use gas or electricity you are forced to contribute towards subsidising commercially unviable technologies that have not yet reached the stage of development that they can compete with energy produced from fossil fuels.  They seem to be designed to disincentivise business from developing commercially viable alternative energy sources.  It is hard to see how this provides any benefit to the country.

 

As Mr Clark explains in his article, “a good slice of the money raised through extra energy charges [goes] to wealthy landowners with wind turbines on their estates.  You don’t have to be an enemy of wind farms to think it unsatisfactory that money is taken from the poor in order to subsidise the rich”.  I agree.  But I think it equally unsatisfactory that money should be taken from anyone in order to encourage a small number of people to adopt unviable technologies to obviate the need to increase their viability so that they can be commercially exploited in the traditional way.

 

 

ROBERT MAAS