The Dutch government misses out on 37.5 billion euros in income every year due to schemes that favor using fossil fuels. Researchers from SOMO, Oil Change International, and Milieudefensie arrived at this amount in a study into how the government “subsidizes” the fossil fuel industry.
Researcher Boris Schellekens of the Foundation for Research on Multinational Enterprises (SOMO) called the estimate conservative. He and his colleagues ignored all costs of environmental damage. “We purely looked at missed state revenues.” The researchers are convinced that their overview is the most complete to date.
The report published on Monday describes 31 regulations that, in one way or another, make the use of fossil fuels more economical. That usually does not concern money that the government transfers to companies’ accounts but mainly tax discounts and exemptions. For example, major natural gas consumers do not have to pay energy tax on most of their consumption, and aviation and shipping are exempt from excise duty on kerosene and fuel oil. Oil refineries, coal-fired power stations, and the steel industry also enjoy such tax benefits.
The biggest hit, 13.5 billion euros per year, is in the energy tax, which is degressive in the Netherlands. That means that companies that use more energy have to pay relatively less tax on their consumption. The researchers call this “a perverse incentive.”
Senior Labour figures accepted valuable gifts from Google in the days before abandoning a plan to tax digital giants more, openDemocracy can reveal.
Labour’s shadow business secretary Jonathan Reynolds, his senior parliamentary assistant (who is his wife), and Keir Starmer’s political director all attended Glastonbury festival in June as guests of YouTube, which is owned by Google. Including accommodation and ‘hospitality’, Reynolds estimates his Glastonbury package for two was worth £3,377 – significantly more than the cost of two regular tickets, which were £335 each.
The next day, reports emerged that Labour had ditched its proposal to hike tax on digital businesses like Google.
The Digital Services Tax, introduced in 2020, is a 2% levy on the UK income of online companies like search engines and social media platforms. In August last year, Reynolds and his shadow chancellor colleague Rachel Reeves had called for an increase in the tax to 10%, saying the income would be used to fund a slash in tax for small businesses.
As recently as 5 June, Reynolds was still talking about the policy. Yet on 26 June this year, the day after Glastonbury ended, The Times reported that the policy had been ditched, with Labour saying it had “no plans” to raise the digital service tax when in government. Reynolds declined to comment.
It was not the only time senior figures in Starmer’s team accepted luxury gifts from Google in the months before the party’s U-turn. Shadow culture secretary Lucy Powell’s political adviser, Labour’s executive director of policy, and the party’s head of domestic policy all accepted tickets and transport to, and ‘hospitality’ at, the Brit Awards in February from the digital giant. Powell’s register of interests estimates that the adviser’s ticket was worth £1,170.
Starmer’s political director also accepted transport to and ‘hospitality’ ahead of the event from Google, though his ticket, along with that of Starmer’s private secretary, was covered by Universal Music.
YouTube will sponsor an event at Labour’s annual conference next month with the chair of the business and trade select committee, Darren Jones. The talk, hosted by the New Statesman Media Group, will be on “harnessing tech for growth”.
Last week, openDemocracy revealed that Starmer had accepted a £380 dinner from Google for him and one staff member during the World Economic Forum in January.
In total, openDemocracy estimates that Labour shadow cabinet members and their staff accepted luxury gifts from Google worth nearly £10,000 over the months before they announced their policy U-turn. By contrast, the value to the British public of the policy Labour appears to have ditched is estimated at around £3bn.
Nick Dearden, director of Global Justice Now, said: “This is a really very worrying set of events which suggests that big business has far too much access to senior opposition politicians.
“But this isn’t simply about foolish behaviour on the part of the individuals concerned. In office, Labour needs to radically restructure our economy if it’s to have any hope of creating a more sustainable and equal society, and undoing the damage of recent governments. To do that, they must take on vested interests, like the Big Tech monopolies, which have far too much wealth and power.”
Staff for other Labour shadow cabinet members have also accepted valuable gifts from controversial companies. A political adviser to the shadow chancellor Rachel Reeves, accepted two ‘box’ tickets to a Harry Styles concert worth £250 each from BT. In the 2019 Labour manifesto, the party committed to nationalising BT, a measure the company opposed. It’s not clear whether the party maintains this policy, but Reeves has distanced herself from other nationalisation plans.
In April this year, BT announced a 14.4% average increase in its prices, and £1.7bn in profit. An Openreach spokesperson said: “As you’d expect from any major employer investing billions into the UK, we engage regularly with a range of stakeholders to support the interests of our people, our customers and our business. Any hospitality is consistent with the rules, fully declared and transparent.”
Updated 31 August 2023:The original version of this article incorrectly stated that the value of the Harry Styles box tickets was £700 each. They were in fact £250 each.
Labour has ruled out a wealth tax if it wins the next general election.
And to make it absolutely clear, shadow chancellor Rachel Reeves has emphasised that Labour would not increase the top rate of income tax.
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The first of Starmer’s 10 pledges when running to succeed Jeremy Corbyn was to “increase income tax for the top 5 per cent of earners.”
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In a recent study the London School of Economics wealth tax commission concluded that a one-off wealth tax was preferred over increasing taxes on work or spending.
A one-off wealth tax on millionaire couples paid at 1 per cent a year for five years, they found, would raise £260bn.
By way of contrast Reeves’s spending plans rise not even to a modest £12bn.
Labour’s latest policy reversal is the clearest sign that Starmer’s electoral strategy hinges on assuring the rich and powerful that neither their wealth or power is threatened by Labour.
This is Westminster Labour’s new philosophy of never-ending poverty for working people.
Image of InBedWithBigOil by Not Here To Be Liked + Hex Prints from Just Stop Oil’s You May Find Yourself… art auction. Rishi Sunak, Fossil Fuels and Rupert Murdoch appear.
BRITAIN’S biggest oil and gas producer Harbour Energy’s whopping £337 million profit comes “at the expense of every living thing on the whole planet,” campaigners said today.
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It is thought that the company benefited from tax loopholes Prime Minister Rishi Sunak put in place while he was chancellor.
This means that for every £100 a company invests in new oil and gas capacity, they can benefit from as much as £45 in windfall tax relief.
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Climate activists This is Rigged commented: “The profit these private companies make is at the expense of every living thing on the whole planet, the least they can do is pay some f****** tax.
“The Orwellian windfall tax introduced by Mr Sunak provides massive tax loopholes for oil and gas companies meaning they can claim almost half the profits back, if they reinvest it directly into —not renewable energy — no, more oil and gas projects.
“That sounds like a bit of policy dreamt up by an arsonist, not a politician.”
The Green Party of England and Wales has called for rail fares to be frozen on the day the government has announced that regulated fares will increase in January 2024.
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Ramsay said: “This government is moving in completely the wrong direction. Fuel duty has been frozen since 2011, while air passenger duty cuts this year will be a disaster for the climate crisis by encouraging people to fly more. This is despite the fact UK rail passengers are already paying more to travel by train than flying and are faced with some of the most expensive tickets in Europe.
“Emissions from transport are higher than for any other sector of the economy. If the UK is to meet its climate commitments, then we need more people choosing trains over cars and planes, and we need more commuters opting for public transport and active travel to get to work. Making train travel more expensive, while closing rail ticket offices that support travellers to get the best deal, would underscore the government’s contempt for climate action and the travelling public.
