Guardian Wants To Add 15% VAT To Your Energy Bills

By Paul Homewood



h/t Joe Public


 Surely the Guardian, not to mention the EU, would not want to deliberately mislead us?



The UK leads the European Union in giving subsidies to fossil fuels, according to a report from the European commission. It found €12bn (£10.5bn) a year in support for fossil fuels in the UK, significantly more than the €8.3bn spent on renewable energy.

The commission report warned that the total subsidies for coal, oil and gas across the EU remained at the same level as 2008. This is despite both the EU and G20 having long pledged to phase out the subsidies, which hamper the rapid transition to clean energy needed to fight climate change.

Germany provided the biggest energy subsidies, with €27bn for renewable energy, almost three times the €9.5bn given to fossil fuels. Spain and Italy also gave more subsidies to renewable energy than fossil fuels.

But along with the UK, France, the Netherlands, Sweden and Ireland all gave more to fossil fuels. The report is based on 2016 Eurostat data, the latest available, and found that across the EU renewable energy received 45% of subsidies and fossil fuels 33%.

The commission report said policies were being pursued to cut carbon emissions and meet the Paris climate agreement goals of limiting global warming to well below 2C above pre-industrial levels. “However, despite this and the international commitments made in the context of G20 and G7, fossil fuel subsidies in the EU have not decreased,” it said. “EU and national policies might need to be reinforced to phase out such subsidies.”

The total fossil fuel subsidies in the EU were €55bn in 2016, the report concluded. “This is a very high number, given we are reaching the deadline for some of their [phase out] promises,” said Ipek Gencsu, subsidies expert at the Overseas Development Institute (ODI).

A significant part of the UK fossil fuel subsidies identified by the commission is the 5% rate of VAT on domestic gas and electricity, cut from the standard 20%. The UK government did not dispute the data but denied that it provided any subsidies for fossil fuels under its own definition and that of the International Energy Agency.

“We do not subsidise fossil fuels,” a government spokeswoman said. “We’re firmly committed to tackling climate change by using renewables, storage, interconnectors, new nuclear and more to deliver a secure and dynamic energy market at the least possible cost for consumers.”

Shelagh Whitley, also at ODI, was dismissive of the UK government’s claim to provide no fossil fuel subsidies. “They are lying,” she said. “It’s absurd. They are playing games and continuing to prop up a centuries old energy system.”

She said the WTO definition of subsidies, accepted by the UK and 163 other nations, includes “government revenue that is otherwise due, foregone or not collected” such as reduced tax rates. Other countries, such as Germany and Italy, call such tax breaks subsidies, she said and noted the UK also gave tax breaks for oil and gas operators in the North Sea. Whitley said that rather than arguing about definitions, the UK should use its tax system to accelerate the transition to clean energy.

In September, the chancellor, Philip Hammond, said the government had “forgone” billions of pounds by choosing not to implement a scheduled rise in duty on petrol and diesel. “The fuel duty freezes since 2011 have meant that the exchequer has forgone around £46bn in revenues through to 2018-19.” He said the tax not collected was “about twice as much as we spend on all NHS nurses and doctors each year”.


Unfortunately the Guardian has been outed by Tim Worstall:



The European Union has a report out telling us that the UK provides more fossil fuels subsidies than anywhere else. This is nonsense nonsense amounting to a lie. But then when did something like that ever stop The Guardian? Or the EU for that matter:

The UK leads the European Union in giving subsidies to fossil fuels, according to a report from the European commission. It found €12bn (£10.5bn) a year in support for fossil fuels in the UK, significantly more than the €8.3bn spent on renewable energy.

Nonsense. The report is here and the miserable little toerags don’t include the footnotes in it. So you can’t see which reports provide their evidence. Except for the dedicated researcher of course, who will find the report here.

On page 396 of which they tell us that it’s entirely possible that reduced tax rates – say, a lower VAT rate – upon domestic energy consumption shouldn’t be called a subsidy. But what the hell, they drop it in anyway and that’s what entirely drives the UK result. The 5% VAT rate.

But yes, of course, it gets worse. Because that lower rate applies to electricity derived from sunshine, from God’s flatus and so on. Therefore it’s most certainly not a subsidy to fossil fuels, is it?

And that’s it really, that’s all there is. They count what is not a subsidy, and certainly not one to fossil fuels, as a subsidy to fossil fuels.

Or, as we could put it, they’re lying. Good that we’re leaving on 29 March, isn’t it?



This is the section referred to by Tim, from the report by Trinomics on which the EU figures are based:




It is of course an utter nonsense for reduced levels of tax to be counted as subsidies. But even if they were, they are subsidies to consumers for energy, and not subsidies to fossil fuels.

At the last count, reduced VAT on domestic energy bills cost £3.3bn in lost tax revenues.But looking at the list provided by Trinomics, their “ fossil fuel subsidies” also include:

1) Zero VAT on public transport – estimated cost £4.3bn

2) Red diesel  – £2.4bn

3) Capacity market  – £1.0bn


None of these are subsidies to fossil fuels either. Indeed, capacity market payments should rightly be regarded as a subsidy for renewable energy.

While reduced tax rates may be income foregone for the Exchequer, to get a true figure, you need to compare this with the overall tax take.

The simple reality is that consumption of fossil fuel raises huge amounts in fuel duties, and producers of North Sea oil have also paid tens of billions in extra taxation in recent years, over and above normal Corporation Tax.

How all of that tax revenue can be replaced in the Guardian’s wonderful fossil fuel free future, heaven only knows.

But hiking domestic energy bills with an extra 15% VAT, which the Guardian are so keen on, might be a start!


What constantly amazes me is how there are still so many people out there who actually believe the drivel the Guardian’s writes.


January 24, 2019 at 01:18PM

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