French tax

Energy crisis: PM ignored advice to scrap green tax and ease bills by millions | Science | New

Economist Gerard Lyons reportedly made the recommendation to the Prime Minister during a private meeting in Downing Street on May 23. Downing Street Chief of Staff Steve Barclay, Cabinet Secretary Simon Case and a selection were also said to have attended. other officials from Numbers 10 and 11. Mr Lyons worked with Mr Johnson when he was Mayor of London.

https://www.telegraph.co.uk/politics/2022/06/08/boris-johnson-ignored-economic-advisers-calls-suspend-green/

According to the Telegraph, Mr Lyons said: “You have to offset the impact of high fuel prices.

“This could include a reduction in VAT on household energy, a further reduction in fuel taxes and – without hurting your green credentials – the temporary suspension of the environmental tax.”

Similar calls have been made recently by Tory backbenchers, who are particularly keen to see ‘net zero’ tax cuts in the context of the current cost of living crisis.

As part of its ‘Build Back Greener’ strategy, the government has set itself the goal of decarbonising all sectors of the UK economy to achieve net zero emissions by 2050.

Downing Street and the Treasury have both resisted demands to withhold any of three suggestions to offset the effects of high fuel prices.

It is understood that tax changes will not be considered until the November budget is prepared later this year.

And this, even though reducing VAT on energy bills was something Mr Johnson himself had called for when he campaigned for Brexit.

The move was rejected earlier this year on the grounds that it would offer only very limited relief from the soaring cost of living.

Chancellor Rishi Sunak announced a fivepence fuel tax cut in March, but it remains to be seen how long the cut will last.

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In the UK, so-called ‘green levies’ are part of the ‘environmental and social bond costs’ paid by consumers through large energy suppliers to fund various energy policies.

The latter funds not only large-scale renewable energy policies, but also measures to improve the energy efficiency of homes and businesses, as well as feed-in tariffs paid to households that generate excess electricity from from renewable sources such as solar panels.

They also help fund the Warm Home Discount, which provides rebates on energy bills to low-income households.

Based on figures from Ofgem, the charity Full Fact has calculated that green levies account for around 7.8% of an energy consumer’s average direct debit bill.

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In the UK, so-called ‘green levies’ are part of the ‘environmental and social bond costs’ paid by consumers through large energy suppliers to fund various energy policies.

The latter funds not only large-scale renewable energy policies, but also measures to improve the energy efficiency of homes and businesses, as well as feed-in tariffs paid to households that generate excess electricity from from renewable sources such as solar panels.

They also help fund the Warm Home Discount, which provides rebates on energy bills to low-income households.

Based on figures from Ofgem, the charity Full Fact has calculated that green levies account for around 7.8% of an energy consumer’s average direct debit bill.

Mr Lyons’ proposals would have seen the UK follow in the footsteps of Germany, which cut its own environmental tax – the ‘renewable electricity surcharge’ – by around 43% earlier this year.

The move was announced in mid-October last year to offer relief to German taxpayers from soaring electricity prices, which were in turn driven by rising gas prices. .

Last year the tax accounted for more than 20% of an average German household’s electricity bill, with money from the surcharge going into a fund used to boost investment in solar and wind energy projects by guaranteeing the prices of renewable supplies for 20 years.

Thorsten Lenck, from the German think tank Agora Energiewende, told EURACTIV that “the reduction of the tax on German renewable energy sources will help stabilize electricity prices for private households and the vast majority of businesses in Germany in 2022”.

Express.co.uk approached number 10 for a comment.