Parties debate green taxes

4th March 2015

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Alexis Durrant

The Conservatives would favour "subtle market interventions" over any hard-hitting green taxes if they are elected to government in May, according to former energy minister Greg Barker.

He told a debate organised by the Aldersgate Group, that, although the Conservatives want to lower the tax burden in the next parliament, there would be a place for taxes that did not hit people’s pockets hard but prompted big behaviour change. He cited as an example the introduction of charges for plastic bags. “That’s the sort of subtle market intervention I’d like to see more of and we can be quite free-thinking and open to new ideas on that,” he said.

Barker called for the Conservatives to be much more ambitious with landfill tax to support the transition to a circular economy.

Energy secretary Ed Davey argued that the key issue was finding a way to properly price carbon and making the EU emissions trading system (ETS) work more effectively. “That is the crucial test, far more than individual green taxes. If we can have the carbon markets working properly it will send signals that will change behaviour not only in the UK, but across the whole of Europe.” If that was achieved it would encourage investment in renewables and carbon capture and storage.

Davey pledged to continue to push for reform of the ETS through his work with the Green Growth Group, comprising energy ministers from across the EU who are ambitious on climate change action. However, he refused to be drawn on the level of the carbon price.

Shadow energy minister Jonathan Reynolds said that one of the genuinely regrettable events during the current parliament was the row after David Cameron called levies on energy bills to fund energy efficiency measures “green crap”. This undermined investor confidence, he argued.

If the next government is another coalition, Barker said the key to an agreement between parties would be affordability of policies. “We have to continue to have real financial discipline. Decc did not have that discipline when the coalition took office and it’s taken several years to instill it,” he claimed.

Reynolds said that Labour’s priorities were further reform of the energy market and effective support for energy efficiency.

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