Call for green hike on gas bills to meet global climate change targets
The UK must consider putting up the rate of on gas to meet its international commitments to halt global warming, the governments advisers said yesterday. At present VAT on gas is 5 per cent for domestic users instead of the full rate of 20 per cent, and the committee on climate change said that this could be seen as a subsidy. It said that keeping the price artificially low encouraged greenhouse gas emissions and that the Treasury should launch an immediate review of whether gas should have lower VAT. The Glasgow Climate Pact, which came out of the Cop26 summit last month, says that members must scrap inefficient fossil fuel subsidies. However, there is no single definition of what a subsidy is and yesterday the government said: The UK does not give any subsidies to fossil fuels. Any increase to the cost of gas could be politically explosive at a time when gas prices have risen considerably. The CCC said the key phrase of eliminating inefficient subsidies for fossil fuel was not straightforward to interpret as there is no single definition of a subsidy. But the CCC said: Under the UK Governments narrow definition of a fossil fuel subsidy - government action that lowers the pre-tax price to consumers to below international market levels - the UK does not have fossil fuel subsidies. But by another definition, that of the International Energy Agency, reduced VAT and the lack of a carbon price on gas and other fossil fuels used for heating buildings, and the lack of VAT or a carbon price on aviation fuel are all post-tax subsidies. The CCC added: If the tax system is to support the transition as it should, a higher and more consistent carbon price across the economy will be needed, which would also remove post-tax subsidies. The Business, Energy and Industrial Strategy department (BEIS) told the Daily Mail The UK does not give any subsidies to fossil fuels. The UK follows the approach of the International Energy Agency. This definition was originally developed with the European Commission and G20 EU Member States to respond to the G20 commitment to phase out such subsidies. In further comments today, the Chairman of the CCC said people should be eating less - but better quality - meat. Lord Deben also said British farmers producing the best meat should not be undermined by trade deals with countries such as Australia, Brazil and the US, where production has a bigger carbon footprint, he warned. Lord Deben, chairman of the independent advisory Climate Change Committee, made his comments at the Country Land and Business Association (CLA) conference focusing on the move towards net zero. He criticised trade deals with countries such as Australia, where references to climate change were removed under pressure from the Australian government, and said there is no excuse for undermining British farmers. CLA president Mark Tufnell also said trade deals should not allow countries that do not meet the UKs high environmental standards to sell their produce here tariff-free. He said UK meat is being tarred with the same brush as that produced in other countries, when British beef emits less than half the greenhouse gases of global average production.