to think green taxes and VAT should be removed from energy bills?

[lonelyapple]

They push up bills by something like 20%.

If you don't think green taxes/VAT should be removed from energy bills can you say why?

I don't think they should because the government still needs money. And climate change is real and we need to change our energy mix.

Where would the government find the money to make up the shortfall?

Taxes and VAT are the governments revenue .There the same of the rest of us you need its coming in to be able to pay it out .

Because you are just kicking an even more horrific can down the road unless we invest in green energy now. It’s shortsighted and foolish to to do this.

No I would prefer that the government capped the increases that energy companies can impose as they have done in France. They have made huge profits already and can afford to take the hit.

In the "typical usage" £1971 bill, government levies account for about £160 and VAT for about £100. This is 15% of the typical bill (not 20%).

There may be some merit to reducing green levies. There is less need for the government to subsidise renewable projects as the electricity they sell has doubled in price in the last 12 months, and likewise the return on investment for insulation and home generation increases as the electricity price increases. Bills also include an amount to pay for smart meters and I believe it is time for this to be wound down.

On the other hand these levies also pay for the warm home discount, which is a scheme targeted at those on low incomes and maybe this should be increased in value or scope.

There is also some merit to reducing VAT. The VAT on my electricity has doubled since September 2021 from 0.67p/kWh to 1.3p/kWh so the government revenue has doubled. They could reduce the VAT from 5% to 2.5% and still get the same revenue. The problem with reducing VAT is that it benefits the rich more than the poor as the rich tend to use more energy. A good compromise would be to leave VAT at 5% on the variable usage charge but to remove VAT totally on the standing charge - so every household would benefit by the same amount.

@Christmas21

Where would the government find the money to make up the shortfall?

Tax unearned income much more - such as that from property. Tax rich corporations more, they currently pay something like 2% tax (Amazon etc). There are lots of ways the Government could bring in more tax rather than taxing plebs, they just don't want to do it because their donors wouldn't approve and MPs wouldn't get cushy jobs after leaving politics. And a lot of the "green energy" taxes go to subsidise wind farms on the estates of very rich landowners.