Greenhouse Gas Emissions: Tax Strategy

Lord Oates Excerpts

Tuesday 6th July 2021 Lords Chamber

Asked by

[Lord Oates]

To ask Her Majesty’s Government what assessment they have made of the benefits of implementing a tax strategy that aligns with the United Kingdom’s net zero greenhouse gas emissions target.

[Baroness Penn (Con)]

My Lords, this Government are committed to net zero and take their legally binding climate commitments very seriously. The UK emissions trading scheme and a wide range of taxes, including the climate change levy and vehicle excise duty, are designed to encourage businesses and consumers to make greener choices. The Government’s net-zero strategy will be published later this year. Any tax changes in future will be considered and announced by the Chancellor.

[Lord Oates (LD)]

My Lords, I declare my interests as set out in the register. In 2019, UK taxes per barrel of North Sea oil were just $1.72, compared with Norway’s $21.35. HMRC estimates that the cost to taxpayers of tax relief for decommissioning the mess the oil companies created themselves is at least £24 billion. Does the Minister think that providing huge tax subsidies to fossil fuel industries while refusing to consider tax incentives such as stamp duty rebates to improve tax efficiency is sending the right signals to meet the net-zero target?

[Baroness Penn (Con)]

My Lords, we are conscious that the net-zero transition requires us to think more strategically about the role of levers that change the price of emitting greenhouse gases in supporting that transition—including carbon prices through taxes or emission trading schemes—and we are doing that work in the context of the net-zero review.