Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will hold discussions with the Secretary of State for Business, Energy and Industrial Strategy about the potential merits of introducing tax reforms with the aim of both reducing the carbon consumption of the wealthiest and raising revenue for climate action.

There are several taxes that have been designed to incentivise greener choices by individuals. For example, at Spring Statement 2022 the Government announced the expansion of the VAT relief on the installation of energy saving materials (ESMs) to residential accommodation in Great Britain. The expansion of the relief, which includes the zero-rating of solar panel, insulation and heat pump installations, represents an additional £280 million of support for investment in ESMs.

This Government also uses carbon pricing to reduce carbon emissions and to help raise revenue to support government priorities including continued climate action.

The UK has two main carbon pricing policies - the Carbon Price Support and the UK Emissions Trading Scheme (ETS). The CPS rate has contributed to a significant shift in the economics of, and investment incentives for, renewable energy sources compared to coal for domestic power generation. The ETS works on the 'cap and trade' principle by setting a cap on the total amount of certain greenhouse gases that can be emitted by covered sectors.

Since March 2021, Government has committed a total of £30 billion of domestic investment for the Green Industrial Revolution.