EDITOR’S COMMENT: This government should learn the lessons of our other countries and avoid introducing a carbon tax. It should not create a tax that would ask workers from the least connected corners of our country to pay more and make us less internationally competitive. Consumer pressure in a free market will achieve far more than a new tax ever could.
These days, the chancellor likes to dip his toe in the water before taking the plunge. In recent days, we’ve had rumours of a mansion tax, pensions’ tax relief reform, a cut to entrepreneurs’ relief and subsidies on insulation and electric vehicles to help people to green up their lives.
Few taxes can claim popular support, but, right now, a carbon tax is one of them. In 2013, the government set a carbon price floor at £9 a tonne of CO2, raising it to £18 a tonne before freezing it until 2021. Originally, the plan was to get it to at least £30 a tonne. At £70 a tonne, it would drive £40 billion of clean energy investment, the policy advisers said.
For COP26 to be a success — if the prime minister is to convince China and India to raise their carbon ambitions — he will need to lead by example. Raising the carbon price floor to at least £30 a tonne, staggered from 2021, would raise £1 billion and secure him the moral high ground. If he let fuel duty rise in line with inflation, after an eight-year freeze, he would bag £1 billion and avoid cries of hypocrisy.