By Sir John Redwood on May 22, 2025
Even the Bank of England and Treasury saw this latest inflation surge coming. They should have as government caused most of it. They put up regulated prices of energy and water. They put up business costs with the tax on jobs. They allowed a large rise in Council tax.
Worse is to come for energy users. The EU is about to expand its emissions trading scheme to cover homes and personal transport as well as power generation and big energy using businesses currently covered. That means UK consumers of gas for central heating and of petrol for their cars will face higher bills when the carbon tax is added. Now the UK wants to merge our scheme with the EU it could well mean extra taxes for UK homeowners and drivers.
On top of this comes the tariff or carbon border tax. This is a levy on imports. The government’s twin passions of stopping us using fossil fuels and putting us under EU control are reinforcing each other. They will make us poorer, with higher inflation and less growth.
Reform and the Conservatives oppose these carbon taxes and the high energy price strategy. It will be damaging for UK business and consumers.
Ever dearer energy May 21, 2025
The UK is seeking to join the EU emissions trading scheme. The UK set up a similar one on its own when we left the EU. Our scheme was less penal on power generation and industry than the EU one, giving us a lower carbon price. Our carbon price is now going up to get closer to the EU’s, meaning more costs for the industrial and energy businesses that have to pay it.
The UK also wishes to impose a carbon based tariff or border tax on imports just like the EU. That is a tax on UK consumers and businesses. Often we have to import as so much industry has been closed by high energy prices and taxes. The UK and EU may agree not to levy the new tariff on each other. The UK should make clear to the EU any attempt by them to levy it would be taken by the UK as a violation of our UK/EU tariff free trade Agreement. There is no need to submit to their carbon schemes to see off the threat of a new charge. The carbon border tax or tariff may well be challenged by other countries through the WTO and may be seen as a provocation by the US.
The UK’s insistence on high energy costs and prices is a main cause of the collapse of petrochemicals, steel, ceramics and other energy intensive industry. Far from boosting growth joining the EU carbon schemes would hit our industry further.