Peter Ainsworth: Conservation is MORE important in tough economic times

Yesterday, in our five-point tax and spend manifesto, we called on the Conservatives to abandon 'replacement taxes' - higher green taxes to pay for lower family taxation.  There is simply no case for higher green taxes at the moment when motorists, hauliers and air travellers are facing rocketing costs.  Noone would fault George Osborne if he got up and said that they're off the agenda for at least as long as oil prices remain so high.

David Cameron hasn't been talking much about green issues recently and the FT has noticed, writing "when [the Conservative leader] set out the priorities for a Tory government this month, he made no mention of green issues."  The shift in emphasis has also reached the Westminster insiders polled by PoliticsHome.com.  Just 13% expect the Conservative party to be the party most focused on green issues at the next election.  73% think it'll be the LibDems.

Peter Ainsworth, Tory Environment spokesman, has responded to all this chatter with a letter to the FT...

His letter insists that the party is still committed to green taxes (sigh) and that combating climate change "remains one of the top policy priorities of our party".  The most sensible thing is said at the start of the letter:

"The idea that green issues evaporate at the first touch of economic hardship betrays a misunderstanding of the environmental agenda. The necessity to build a sustainable economy is not just a “green issue”. It is just as much an economic one; business as usual is clearly unsustainable in the long term. Current economic stresses should underline that point rather than diminish it.  Any public policy that makes our vehicles, homes and businesses more fuel-efficient and encourages the use of cheaper, more reliable sources of energy is not peripheral, but central. Green policies therefore become more important in times of economic stress, not less. The issues of increased energy costs and the need for emissions reductions must be addressed by policies to develop low-carbon technologies."

We can sign up to the thrust of the argument but the price mechanism - rather than government intervention - should be the main driver of any conservation.

Comments

[Alex Agius]

What other issues should a Conservative goverment ignore Tim?

We should not ignore any issue. How can we claim to be a goverment for the whole country if we are going to ignore important issues?

[Editor]

What on earth are you talking about Alex?

[John W]

At a very broad brush stroke:

Of course we need to cut taxes - they are destroying our economy and society itself.

But we shouldn't abolish taxes, only the the loons advocate this.

So while we believe it right to tax there should be some basis on which we decide who pays what and when.

This is what a commitment to replacement green taxes means. That the factors on which we will decide where taxes are levied will include environment issues.

This is very sound, mainstream economics - making private users pay for the costs they exert on society.

Don't let an abhorrence or soft issues cloud your judgement.

[Alex Agius.]

Tim - the clipping from the FT you display shows the headline "Tackling climate change remains a policy priority for Tories"

Your reaction to this seems to be disapointment, sorry if I have misread this. This promted my comment about "What other issues should a Conservative goverment ignore Tim?"

[Jennifer Wells]

We may not be going abroad this year because of air fares. Higher oil prices are enough. Green taxes would break the back of family holidaymakers.

[David]

Perfectly correct - in a context where the rise in prices is partielly down to environmental issues (energy, food etc), to turn away from trying to reduce the impact we have on the environment and get more from renewables and recycling would be utterly foolish. We need to make the tough choices now to ensure that the difficulties today don't become the norm a few years down the line. Anything else is simply short termism.

[David]

i We may not be going abroad this year because of air fares

So?

[David]

"the price mechanism - rather than government intervention - should be the main driver of any conservation."

Fine, but you should recognise that sometimes markets fail to adequately price in all negative externalities; it requires government to correct this.

[Editor]

Okay Alex; In summary I'm saying take green taxes off the table for the near term and allow the market to take the lead in how householders, motorists and businesses conserve energy etc.

[Fiona]

Editor - Alex is absolutely right. What is the point of making a commitment to tackle something which is a problem if we veer off and say it's too difficult? The point about these green taxes is that they will be REPLACEMENTS for other taxes; there will be a certain amount of choice in whether you pay them (though I accept that it's not possible to make the choice to avoid all of them!); they will be used to influence people's behaviour. The market will not take the lead unless the demand is there. Sufficient demand is not there (as we can see at the moment) to make it really worthwhile for companies etc to develop properly green alternatives because people haven't changed their behaviour.

There is an argument to be had on the extent of green taxes: the fact of them is here to stay.

[Pericles]

From http://www.ehponline.org/docs/2002/110-5/forum.html

One of the most troubling results of these fires, he says, is the carbon dioxide (CO2) they generate, including about 360 million metric tons of CO2 from underground coal fires in China alone. "The CO2 production of all of these fires in China is more than the total CO2 production in The Netherlands," Rosema says. This amounts to 2-3% of the annual worldwide production of CO2 from fossil fuels, or as much as emitted from all of the cars and light trucks in the United States.

Global warmists are water melons. Green on the outside, red inside. Environmental taxes are just robbery.

[Alex Agius.]

I thought our (Conservative) policy is to shift some of the current the tax burden to things that damage our environment. Part of this includes tax cuts in other areas.

This leaves the overall level of tax the same, therefore no tax increase. And over time (due to the proceeds of growth rule) overall tax will be cut under a Conservative goverment. I can not see what is objectionable about this.

[Editor]

Yes Alex that is the policy but as I attempted to argue yesterday it's risky politics. The beneficiaries of the lower taxes tend to be a lot quieter than the victims of the higher taxation; witness the 10p row. For the time being green objectives are surely being met by high fuel prices?

[Tory_boy]

The commitment to green issues hasn't been abandoned, but the point is that while replacement taxes were ok when fuel prices werent quite so high, now that they are rising we would be advocating a policy of increasing fuel costs for working families just after the 10p tax fiasco gave us some traction with working families.

Not only this but they would make life even harder for working families who are in desperate need some of help

Green taxes arent to be totally abandoned but if we increase them now then we will be making it even harder for people to live their lives. The editior is right to suggest deferring them to a later date

[Yogi]

I am in favour of the fuel tax escalator which comes into force in October. There are a number of reasons to my conclusion.
a) petroleum is a finite resource and with demand from the Asian countries growing exponentially (and a lot of them subsidise petrol) the price may go up faster than desirable, unless we in the west reduce the consumption.
Farmers can be cushioned by red diesel and the elderly can also be given assistance to ensure that they do not scrimp on heating.
As for people living in rural communities, I am afraid that you cannot have the cake and eat it - it will discourage frequent car journeys and encourage car-sharing and with it the community spirit;
b) it is a better way of reducing the traffic (in London it definitely shows and also on the M42/M6 when I went to Crewe) and more effective than the congestion charge;
c) helps reduce direct taxation; the more you drive the more you pay and the bigegr the engine is the more you pay;
d) can do with a flat £100 Annual Road tax regardless of the engine size;
e)improves the balance of payments (less oil import, less foreign travel due to higher airfare), will help keep down import inflation due to stable pound.

All in all the higher fuel tax has so far helped to reduce the percentage increase in the cost of petrol at the forecourt and been a stabilising factor.

d)
c) the f

[Abe]

It depends how the balance is met. The principle is exactly right: if hauliers' costs (for example) go up from fuel duties, don't cut those duties, but cut a parallel business tax to mitigate the effect. This keeps encouraging businesses and people to shift to greener solutions and hopefully expedites our movement to more sustainable and reliable fuel sources because it offers a clear market incentive.

My concern though is how to create a model of taxation which isn't overly bureaucratic but which is fair and responsive to the impact of fluctuating fuel bills.

I do think it's right to stop talking about it, especially while families and businesses are being squeezed from all sides by this government, but as a guiding principle, shifting the weight of taxation from families and businesses outright and onto green taxes me as common sense.

[Andrew Woodman]

I might be missing something here but if we simply use replacement taxes, won't people just be using the tax saved in one area of their lives to pay the extra green taxes. I just don't really understand what the policy will achieve. I don't see tax as the salvation to this.

[Sammy Finn]

Andrew: Because families with kids will be winners and people who use cars, planes a lot will lose. I'm simplying but not much. There'll be overlap between the two groups but lots who fall outside of the overlap.

[Andrew Woodman]

So we increase the tax burden on single people. I don't like this line of policy to be honest. I grew up in a village where public transport consisted of a bus every 2 hours. Either you have a car or you don't have a life. Another attack on rural communities isn't what's needed. More taxes sin't the answer.

[Peter Rodger]

Should there be any green taxes?

31,072 American scientists have signed this petition,
including 9,021 with PhDs

http://www.petitionproject.org/

[George Hinton]

There is a perception in the public's eyes that "green" measures are supplementary taxes, achieve little and are there to disguise mainstream taxation increases.
Whilst accepting that there is some mileage in global warming I am not fully convinced. Mainly by the screeching harpies of the left who have used this band-wagon to replace nuclear disarmanent, now that Soviet Russia has disappeared and the role of VLIYANIYA (Fellow Traveller) defunct.
Scientists are not in accord on global warming and that needs to be addressed and the real facts delivered, not propaganda orated by a failed-non-President of the US.
With economic growth on-going in China and India yet to come on stream and many other countries making efforts to industrialise, any savings that we generate are minimal and lost to China's increased levels of pollution.
I for one am not prepared to wear the hair shirt, nor prepared to beggar myself for someone's legacy or flawed political leanings and thinkings.
DC please note and do not paint yourself into corners by the blandishments of the SIG's.

[Jay]

Andrew W, replacement taxes work very simply and effectively.

If you shift the tax burden away from the things that benefit society, let's say by reducing personal taxes, and onto activities with a negative environmental impact (for example, aviation and driving, which cause climate change), a rational individual will reduce their driving and flying, and yet have more disposable income and be more incentivised to work.

This is a win:win scenario which Sweden has been pursuing for years. It encourages people to live near public transport, to use local shops and services, to holiday closer to home, and supports local communities and supply networks.

It is NuLab which is wedded to big business and has destroyed local communities. Long live Conservatism!

[Graham]

My wife and myself support an Educational Charity by going into schools to help in the teaching of history (A subject that is treated very badly by the present government). A fee is charged to cover cost but as the cost of travel rockets the amount of schools we can cover with out ending up out of pocket reduces. These increasing costs in travel partly caused by rising taxes will finish off our word and leave education the poorer. What ever solution is arrived at must take in to consideration people like ourselves who give of our knowledge and time willingly.

[Andrew Woodman]

Jay, that all sounds very good in principle, but I don't believe it will work in practice. I can't believe there are all these people (esp those on lower incomes) who are all driving and flying for the hell of it. Most driving esp in rural areas in essential to get to work, kids to school ect. For people to holiday closer to home, that will surely involve driving for most people.

In practicle terms, I don't see these green taxes having a major effect in behaviour, and will only succeed in punishing the worse off.

[comstock]

This is a win:win scenario which Sweden has been pursuing for years..........Long live Conservatism!

Ah come on!

Present governement aside, Sweden has had centre left governement for most of the last 80 years!!!!!!

[Isoceles]

"Global warmists are water melons. Green on the outside, red inside."

Thanks Pericles, that's a really compelling argument

[Benet Northcote]

We can sign up to the thrust of the argument but the price mechanism - rather than government intervention - should be the main driver of any conservation.

So Tim, can I take it that you support a mandatory cap and trade system for carbon?

The EU Emissions Trading Scheme (ETS) is a market mechanism, as it sets a price for carbon. It is also without doubt an intervention in the market as it limits the amount of CO2 we can release.

Interestingly the ETS is based on the same mechanism used to remove ozone depleting gases from the atmosphere some years ago.

[David Parker]

We should stop using the word "Green" as a generic term and say what we really mean. Certainly climate change exists, and has done so since before the first human beings, however how much human activity is currently affecting this still a moot point, though destruction of the rain forests probably constitutes a more immediate effect than any other factor. Equally certainly mankind's present consumption of hydro-carbons, as a source of fuel is unsustainable, even in the medium term, purely upon the grounds of the remaining supply of a finite resource. Both nationally and internationally therefore, fuel sources and supply pose an urgent problem. However, this is not an excuse for the deliberately exaggerated near hysteria engendered by politicians, the media and numerous commercial cowboys over "green" issues, all trying to promote their own personal agendas.
Just to give one example, without the massive commercial subsidy given to Wind Factories,none of these would exist for they would not be economically viable, nor, certainly onshore, in view of the very substantial infrastructure involved are they even environmentally and ecologically sound. But, propped up by massively inflated production payments subsidised by the increased charges levied on consumers (another form of green tax) they form an attractive commercial milch cow, whilst actually causing environmental damage.

Used politically or commercially therefore, the word Green should be viewed very sceptically, or, when used with reference to MEPs of the Green Party, should be construed as meaning its other definition of callow or inexperienced.

[Sam Tarran]

"Any public policy that makes our vehicles, homes and businesses more fuel-efficient and encourages the use of cheaper, more reliable sources of energy is not peripheral ..."

Efficiency, but at what cost to lower-earners?

[John Moss]

If we have "reached the acceptable limit of taxation and borrowing", doesn't that mean no more increases at all?

If we were bold and implimemted our education reforms swiftly, putting money in the hands of parents first, for them to them take to the schools of their choice, a market would quickly become established. We could then freeze education spending in cash terms - a real terms cut - and let the market drive out waste to maintain real spending.

Then we do Health... then we do Welfare....

[Ken Stevens]

Ironic that people advocate green taxes to reduce car use and, on the Henley constituency leaflet thread, someone regrets inability to assist on Saturday because neither Thame nor Watlington has a railway station!

There are three railway stations: Goring, Henley and Shiplake, all on the periphery of the constituency. Bus services are not exactly plentiful or frequent.

But of course a car in this rural area is a dispensable luxury.....

[Stewart Geddes]

The problem here is that all these ideas of green taxes attacks the aspirations of the ordinary people. There are many people who have no option but to use cars - have any of you tried to do a weekly shop using the bus? Or transport a family anywhere? It can be done, but is always more expensive slower and more inconvenient than the car assuming that the bus is there when you need it. If you are wealthy you may be willing to pay the cost. If you are poor you have no option.

Then of course there is the assumption that co2 is in fact the cause of climate change, or even that the human produced element makes a difference, or even can or should be managed. The science on this is not as clear as people would have you believe.

Sure, we need to conserve resources, but to use taxation that penalises the poorest in society is not something I want to support.

[John Prendergast]

Nice man, Peter Ainsworth is a scientific illiterate. I have tried to educate him that the GW scare was over in USA in 1998 and here in 2000 -2001. It is now already getting a lttle cooler (record Arctic Ice this winter). Ainsworth is not different from much of UK's thick Establishment but we all pay the price of their conceit and confidence trickster schemes.

UK should be loud and clear that while soot and SO2, SO3, Methane, and NOX are nasties, CO2 is not. Man makes 0.28% of global warming when all factors are rationally considered.