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<p>The VAT reduced rate for domestic fuel and power is aimed at reducing costs on
household purchases of several supplies of energy, including electricity which is
generated from renewable sources. This measure helps lower the cost of household bills
for families.</p><p> </p><p>The UK Government also places additional taxes on the
extraction of oil and gas, with companies engaged in the production of oil and gas
on the UK Continental Shelf subject to headline tax rates on their profits that are
more than double those paid by other businesses. To date, the sector has paid over
£330 billion in production taxes.</p><p> </p><p>The UK is currently a net importer
of both oil and gas and even under the most rapid energy transition scenarios, the
UK is expected to remain a net importer for the foreseeable future. Managing the declining
production from our relatively small domestic basin, while reducing our overall usage
of fossil fuels, is therefore compatible with our climate change commitments.</p><p>
</p><p>Overall, the UK is fourth on the ODI’s 2018 G7 Fossil Fuel Subsidy Scorecard
and is ranked first among G7 nations for pledges and commitments. Since the ODI published
their report, the Government has signed a target of net-zero greenhouse gas emissions
by 2050 in law, becoming the first G7 country to set such a goal. Among a range of
other actions, we have also launched a comprehensive global review of the link between
biodiversity and economic growth to be led by Professor Sir Partha Dasgupta.</p>
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