Wrong Again: What Ed Davey Didn’t Tell You About Soaring Green Taxes And Levies


There are taxes and then there are Green taxes. The latter are used as punitive levies in successful industrialised countries like the UK so politicians can advertise that they really, really do care about the environment. Trouble is, they care and we pay for their conceit.

On March 19 the Daily Telegraph published a story highlighting the hike in taxes we will all be expected to carry as Green levies on energy bills look set to to treble by 2020 because of the cost involved in meeting renewable targets. These are expected to fund new wind, solar and nuclear plants.

The financial impost of renewable energy subsidies will therefore rise from £3.1 billion to £9.4 billion by the end of 2020, according to the government’s own estimates. The climb is being driven by the desire for 30 per cent of Britain’s electricity to come from renewable sources by 2020.

That in itself is enough to make any reasonable person stop and ask the question: Is the Green religion worth it if the cost is so prohibitively high? Of course, the answer is: no it isn’t.

Paul Homewood, on his Notalotofpeopleknowthat blog, agrees. He has taken another look at the numbers and found out that they are too low. He contacted the Office for Budget Responsibility (OBR) and confirmed that the costs will be a good deal higher than the government first dare reveal.

Homewood says: “First, the OBR have confirmed that the £9.4 billion figure is the nominal value, i.e. at 2020 prices, not at today’s prices. The OBR assumptions show a rise in CPI of 10% between now and 2020, so at today’s prices the £9.4 billion equates to £8.5 billion. (I hope this makes you feel better!).

“Unfortunately, though, that is the only bit of good news. The £9.4 billion figure is the cost of what the OBR describe as “Environmental Levies”.” Homewood then outlines a few other taxes and levies that are not included under that above category, viz;

1) Climate Levy/Carbon Floor Price
This amounted to £1.2bn last year, and is set to increase to £1.6bn by 2020.
2) Air Passenger Duty
Currently raises £3.0bn, increasing to £3.7bn by 2020.
3) Energy Company Obligation/Smart Meters
The OBR offer no figure for this, as it is outside their remit. However, DECC’s projections show the annual cost of this, which all falls on domestic users, rising from £39 to £59 between now and 2020, (at 2014 prices). Based on 26 million households, the cost by 2020 would be £1.7bn.

When all of the above is combined, the total cost of the various levies soars to £90.6bn between 2013/14 and 2019/20. Which is a figure a considerably further north than we were originally told by the the Secretary of State for Energy and Climate Change.

That new figure as calculated by Homewood equates to £3485 for every household in the country. Ed Davey never made that clear because he either didn’t know or he was simply being disingenuous as he sought to burnish his Green credentials.

I suspect it was both.


Please let us know if you're having issues with commenting.