Keir Starmer’s Government is in “ongoing” talks with the EU to align Britain on two types of net zero taxation, GB News can reveal.
Reform UK’s Deputy Leader Richard Tice brands the Emissions Trading Scheme (ETS) and a Carbon Border Adjustment Mechanism (CBAM), as well as other net zero schemes, “the greatest act of financial self-harm ever imposed on a nation by its own Government”.
Former Conservative MP Sir John Redwood does not hold back either, dubbing these schemes “anti-industry”.
What we know so far about these net zero taxes
The claim that Downing Street was in talks to align with the EU on these net zero taxes can be traced back to a Reuters interview with the EU’s Commissar, Mijneer Hoekstra.
He told the publication on January 14: “We’re going to start the negotiations next week.
“The UK has been doing, over the years and across the political aisle, a great job in terms of climate action. So, in my view, this is imminently doable.”
After the Reuters interview, a Government spokesman “declined to comment on when negotiations would launch”, adding: “We are delivering on our commitment to secure a carbon linking agreement with the EU as soon as possible.”
The Government confirmed talks are ‘ongoing’ with the EU on net zero taxes
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PA
On January 28, thinktank Facts4EU, in association with Stand for Our Sovereignty and GB News, approached the Government about these talks and received the following reply: “Talks are ongoing and are expected to continue for some time.
“We expect resolution in time for the next summit.”
The ETS is a tax on businesses that generate greenhouse gases.
They can trade these on a market, to “offset” their emissions, or pay the full tax. As the Facts4EU report authors explain, this alone can be “ruinous” for some sectors.
A CBAM is a tax on imports, to account for the greenhouse gases involved in producing the goods being imported.
The idea is to put foreign companies’ prices on the same basis as home producers.
However, this increases consumer prices for otherwise cheaper products, Facts4EU warns.
Mr Tice said: “I’ve said it before and I’ll say it again: Net Zero is the greatest act of financial self-harm ever imposed on a nation by its own Government.
“This latest news exposed by GB News just shows the Government doesn’t want you to know about what they’re doing.
“Not only that, but this is all part of their continued alignment with their friends in the EU. We should be doing everything possible to help British industry.
“Instead [Ed] Miliband and friends are doubling down by holding talks – if not right now but imminently – on matching the EU’s carbon taxes, making us all worse off. It’s ideological and we’re going to rip it all up.”
Analysis of data from the Department for Energy Security and Net Zero shows large real-terms increases since the 2015 Paris Agreement on climate change.
According to Facts4EU, the average real consumer electricity price has tripled in the past decade, while the average cost for the industrial centre has doubled in real terms over the same time period.
According to Facts4EU, the average real consumer electricity price has trebled in the past decade
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FACTS4EU
Sir John said: “The extra cost of the carbon tax next year added to the extra cost of imports attracting the carbon border tax will be a double blow to UK industry already badly weakened by high taxes and policies designed to cut their use of fossil fuels when the overseas competitors go ahead using more cheaper gas and coal.
“The EU are set means aligning us with some of the highest tax rates on industry worldwide.
“The US with no carbon taxes in most places, and China with lower ones, will be loving this further self harm by the UK.
“Worse still is the PM will probably agree we have to pay the EU for the privilege of adopting their anti industry schemes.”
Data shows the average electricity fuel price had doubled for the industrial sector in real terms in the past decade
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FACTS4EU
Facts4EU analysis says there is a rationale for taxing imported high-carbon products, such as concrete.
If British concrete is taxed under the Government’s ETS, imports should face similar taxes to ensure a fair, competitive market.
The think tank, however, questions whether UK industry should have to pay taxes generated in the UK while already struggling with very high energy costs.
Sir John added: “The UK already imposes a high carbon tax on business, charging them the UK market price for carbon.
“The Government fixed the 2025 price based on 2024 trading levels at £41.84 per tonne of carbon dioxide.
“Competing countries like the USA and many emerging markets do not impose a similar tax. The current UK market price is £50.
“The European price from their scheme is currently £77, considerably higher than the UK.
“The UK government wishes to join the European scheme, so British business has to face a further hike in a tax which is already making them very uncompetitive.
“Heavy fossil fuel-using industries in the UK are losing many factories and investments, forced out by these high levels of additional taxation.
“The EU reset will come at a high price, imposing extra costs on business and helping close more factories in the UK.”