Essay by Eric Worrall

I set forth my position that the ONLY reason Jeremy Hunt is raising taxes on working- and middle-class voters is to preserve the Government Net Zero agenda.

The following is from Chancellor Jeremy Hunt’s British Government Autumn Budget statement, delivered yesterday.

…

Although my decisions today do lead to a substantial tax increase, we have not raised headline rates of taxation, and tax as a percentage of GDP will increase by just 1% over the next five years.

I start with personal taxes.

Asking more from those who have more means that the first difficult decision I take on tax is to reduce the threshold at which the 45p rate becomes payable from £150,000 to £125,140.

Those earning £150,000 or more will pay just over £1200 more in tax every year.

We are also taking difficult decisions on tax-free allowances.

I am maintaining at current levels the income tax personal allowance, higher rate threshold, main national insurance thresholds and the inheritance tax thresholds for a further two years taking us to April 2028.

Even after that, we will still have the most generous set of tax-free allowances of any G7 country.

I am also reforming allowances on unearned income.

The dividend allowance will be cut from £2,000 to £1,000 next year and then to £500 from April 2024.

The Annual Exempt Amount for capital gains tax will be cut from £12,300 to £6,000 next year and then to £3,000 from April 2024.

These changes still leave us with more generous allowances overall than countries like Germany, Ireland, France, and Canada.

And, because the OBR forecasts half of all new vehicles will be electric by 2025…

…to make our motoring tax system fairer I have decided that from April 2025 electric vehicles will no longer be exempt from Vehicle Excise Duty. …

…Read more: https://www.gov.uk/government/speeches/the-autumn-statement-2022-speech

Chancellor Jeremy Hunt intends to increase taxes by 1% of GDP.

How much of that money is the government spending on Net Zero? Here it gets a little murkier.

The Grantham Institute estimates the Net Zero push will cost 2% of GDP, but the government maintains most of that investment comes from private business.

I would argue that 2% of forced expenditure, coerced by Net Zero policies, is effectively a disguised tax, equivalent to the government taking 2% extra tax, and spending it on Net Zero policies directly.

Grantham also expects a net benefit of 4% of GDP, but even if you believe the alarmism, this alleged benefit is not immediate, and will only accrue if everyone else makes similar CO2 emissions cuts.

Headline findings

• Under current policies, the total cost of climate change damages to the UK are projected to increase from 1.1% of GDP at present to 3.3% by 2050 and 7.4% by 2100.
• Strong global mitigation action could reduce the impacts of climate change damages to the UK from 7.4% to 2.4% of GDP by 2100.
• The greatest single risk of climate change damages to the UK economy is from catastrophic disruption to the global economic system (worth 4.1% of GDP).
• Foreign trade will, under current policies, cause a 1.1% fall in UK GDP as other countries experience losses from climate change.
• Agriculture is one of the UK sectors expected to be most impacted by climate change. The reduction of arable land as regions become drier is projected to halve its total contribution to UK GDP by 2100.
• There are strong economic reasons for the drive to net-zero: the benefits from mitigation exceed the costs in the second half of the century
• Co-benefits include significant health improvements, due largely to cleaner air, and stimulation of the economy through investment.
• Combined, the net-zero transitions (estimated to cost a maximum of 2% of UK GDP) is expected to have a net benefit of around 4% of GDP.
• In the future, natural disasters, tourism, forestry, transport, conflict and displacement are likely to emerge as significant channels of climate risk.
• Proactive investment in adaptation measures such as coastal protection can greatly reduce the risk of climate-related damages.

Read more: https://www.lse.ac.uk/granthaminstitute/publication/what-will-climate-change-cost-the-uk/

It gets worse. Last month, the Government accepted a high court judgement that their Net Zero policies are inadequate. This judgement will force the government to either increase coercion, increase direct expenditure, or both.

UK GOVERNMENT TO DROP NET ZERO STRATEGY APPEAL

October 2022

Michael Salau, Priya Thakrar and Rhia Gould

In July 2022, the High Court ruled that the UK government’s Net Zero Strategy (“NZS”) breached its obligations under the Climate Change Act 2008 (“CCA”).

…

Whilst the government had applied for permission to appeal the High Court ruling, on 13 October 2022, it confirmed in a letter to the High Court that it would not be pursuing its appeal. The government will have until March 2023 to update its NZS and provide more information on how its policies will achieve the targets set out in the CCA.

…Read more: https://beale-law.com/article/uk-government-to-drop-net-zero-strategy-appeal/

Jeremy Hunt is under a legal obligation to explain to the court how he intends to bring Britain back to compliance with the 2008 Climate Change Act. Hunt has until March 2023 to provide that explanation. He has not yet done so.

Jeremy Hunt’s tax rises in his own words amount to 1% of GDP – half the estimated economic cost of Net Zero.

How much of that 1% tax rise will end up being spent on the Net Zero push? I would argue all of it. Under the terms of the 2008 Climate Change Act, the British Government is legally obligated to meet intermediate targets in its progress towards Net Zero 2050. The High Court ruling is that the government is in breach of its obligations. So, the choices are, repeal the 2008 Climate Change Act, or for the British Government to make up the shortfall in private investment – raise taxes and spend whatever it takes to repair the breach of the government’s obligations to meet the Net Zero target, including intermediate targets, no matter what the cost.

So, the hidden 2% tax becomes a 1% real tax and a 1% hidden tax.

Doesn’t this leave voters in the same position as before, effectively still paying a 2% Net Zero tax? Probably not. Much of the heavy lifting for the hidden 2% would have been paid by corporations. In my opinion, what Jeremy Hunt has done has quietly transferred more of the burden of funding Net Zero directly onto the middle and working class – a silent tax cut for rich people, many of whom are likely already net beneficiaries of Net Zero policies, through their investments in wind farms and solar panels.

In a way this transfer makes the burden of funding Net Zero more obvious. But regardless of whether corporations or working and middle class pay the direct bills, that 2% is an ongoing burden on the British economy. All costs paid by corporations are passed on to consumers.

The only real solution I see is to abandon coercive Net Zero and allow British energy companies like Caudrilla to restore affordable gas prices, by permitting them to frack. And of course, if claims that renewables are cheaper are true, allow the green revolution to proceed at its own pace, without unbearably expensive government coercion.

Over to you British voters.

via Watts Up With That?

November 18, 2022

Prevent British Tax Rises, by Abandoning Climate Change Goals — Watts Up With That?