EDITOR’S COMMENT: another “green tax” won’t be enough to change behaviour and besides, ordinary people can’t afford any more taxes. The government needs to stop finding ways to increasing the tax burden and start finding ways to protect jobs and reduce bills.
In 2011, Australia introduced the Clean Energy Act to levy additional taxes on carbon emissions. It was repealed just three years later. Since then, British politicians have repeatedly advocated following suit, with 516 references made to the idea of a “carbon tax” in Parliament over the past five years. There are several reasons why a carbon tax would be an unwise addition to the UK’s already burgeoning, 50-year record tax burden.
In February, Philip Aldrick, Economics Editor at The Times, called for Boris Johnson’s government to introduce a carbon tax so that Britain could “lead by example” and convince other nations, like China and India, to lower their emissions. The objective of a carbon tax is to lower levels of greenhouse gas emissions by increasing the costs of items and practices that emit CO2. Some carbon tax proponents insist that it ought to be imposed in a manner that impacts only businesses, not consumers. But there is no such thing as a tax that hits only business or producers. Any tax on them will be felt by ordinary consumers down the line.
It is important to note that Britain has levied taxes on carbon, especially fuel prices, for almost three decades. Our current tax on diesel is the second highest in Europe. These taxes have sparked repeated fuel protests across the UK, notably in 2000, 2005 and 2007. Flights would be further hit by a carbon tax as they emit comparatively significant amounts per head, although the aviation industry as a whole produces just two per cent of all human-induced carbon emissions. A new carbon tax, like any increase, would impact Britain’s £120 billion tourist industry in a variety of ways. But its effect on flights would be especially pernicious for tourism, because the price of flights has a disproportionate impact on where people choose to visit.
In ‘Red Wall’ seats that Boris Johnson ‘painted blue’ last December around five in six workers travel to work by car. Drivers already pay hefty taxes on cars, from VAT on fuel, to the road tax, to the insurance premium tax, and it would be unfair to further increase their tax burden.
Many sectors, like the steel industry, have struggled in recent years. In these industries energy represents between a quarter and half of the total costs. A damaging carbon tax could be the final nail in the steel industry’s coffin. All of British manufacturing would fear for its future and rightly so.
Any carbon tax would need to be accompanied by significant reductions in the tax burden elsewhere to offset its impact.