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Environment Protection: Taxation

Question for HM Treasury

UIN 219213, tabled on 17 December 2014

To ask Mr Chancellor of the Exchequer, what assessment he has made of the net Exchequer effect of green (a) taxes and (b) subsidies in the last five years.

Answered on

5 January 2015

The Government classifies environmental taxes as those that meet all of the following three principles:

  • The tax is explicitly linked to the Government’s environmental objectives

  • The primary objective of the tax is to encourage environmentally positive behaviour change

  • The tax is structured in relation to environmental objectives

    Based on these principles, the Government has defined the environmental taxes as the Climate Change Levy, the Aggregates Levy, Landfill Tax, the EU Emissions Trading System (EU ETS), the Carbon Reduction Commitment Energy Efficiency Scheme, and the Carbon Price Floor.

    In May 2010, this Government committed to increasing the proportion of tax revenue accounted for by environmental taxes. The forecast from Budget 2014 demonstrates that the Government remains on track to achieve this commitment, as shown in the table below:

2010/11

2011/12

2012/13

2013/14

2014/15

2015/16

Revenue from Environmental Taxes

£2.5bn

£3.0bn

£3.0bn

£3.8bn

£4.7bn

£5.1bn

Total Tax Forecast Receipts

£555.7bn

£577.5bn

£593.5bn

£619.8bn

£648.2bn

£675.5bn

Proportion of total tax receipts

0.5%

0.5%

0.5%

0.6%

0.7%

0.8%

Many of the policies aimed at supporting renewables and reducing the UK’s greenhouse gas emissions are funded by consumers, with neutral cost to the Exchequer. Detail on spend which is funded by the Exchequer in these areas, including the Renewable Heat Incentive, is published in the Department for Energy and Climate Change’s Annual Reports and Accounts.

Answered by

Treasury
Named day
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