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UK Budget 2009 - A Real Green Deal for the UK



A Cambridge-based think tank today challenged the government to face facts on it's progress on climate change, and adopt an alternative 10 point plan.

The Systemic Fiscal Reform Group, headed by entrepreneur, Dr Adrian Wrigley, argue that governments such as the UK and US government are failing on their economic, climate change and poverty goals because they have failed to look for systemic ways of addressing problems that have repeated for many years.

"The failure to make progress is quite a simple one.", argues Wrigley, "The UK government cannot expect the massive entrepreneurial drive that is needed to de-carbonise our economy, when they continue to penalise what's good, and subsidise what is bad."

"How absurd is it that we have objectives to reduce carbon emissions, and yet still charge full rate VAT on home improvements, and only 5% on the fuel.  It's time the government freed businesses from the ridiculous burden of a tax on enterprise, and switched to taxing on the basis of waste."

The Systemic Fiscal Reform Group was founded in 2008 out of a chance meeting of interested parties at a seminar on carbon taxation.  At that meeting it was Dr Wrigley who was arguing that it was only a matter of time before the government's favoured system for tackling climate change, the EU Emissions Trading Scheme, faltered.

Group member, Neale Upstone has been looking at carbon trading, and believe the government need only make small changes to make a big difference.  "Carbon prices are now so low that they are meaningless.  It is no suprise that energy companies such as Shell and BP are switching away from renewables.  I want to see the government give business the certainty that it wants.  If the government was to announce a £30/tonne reserve price on all future permit auctions, we'd see sufficient stability to bring billions of pounds not just into current projects, but also into funding the research that can have the UK leading the world".

The group is calling on the government to take full advantage of the limited flexibility in the EU VAT rules, and to immediately start emergency negotiations to entirely replace VAT with energy taxes.



Media contacts:
- Adrian Wrigley - 07xxxx xxxxx
- Neale Upstone -



The 10 Point Plan

 Action
 Benefits
 
1. Reduce VAT rates to 5% on the following services:
  • repair and renovation of private houses
  • restaurant
  • cleaning in private houses (incl. window cleaning)
  • domestic home help for young, elderly, sick, disabled
  • hairdressing
  • bicycle, shoe, clothing, linen repairs

The Council of the European Union agreed to allow these additional items to benefit from a 5% VAT rate.
  • Remove the differential between new build and renovation
  • Stimulate the building industry to help insulate our housing stock
 Remove the domestic fuel subsidy by increasing rate to 15%

A short term measure to create a price signal to incentivise energy efficiency measures such as low energy lighting, insulation, and cost-effective renewable energy (not domestic wind turbines!)
 
Maximise VAT reg threshold
 to take more small businesses out of VAT and allow them to focus on their business, not their adminstration.
  
 
  • Council Tax - Change to being paid by owner, who is liable for the payment of council tax
    • Simplifies administrative burden
    • Allows electronic billing and payment on long term due to stability of who is paying
 


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