For those that support green taxes, or to use the government’s jargon ‘environmental taxes’ it is worth noting just how much of the money that is collected in taxes, is actually reinvested into the environment and into reducing emissions. Given the numbers, it is little wonder that there are so many sceptics in the UK, in fact it is something of a scandal. This government is forever telling us how they value the environment, how they are leading the word in the reduction in carbon emissions and why it is so important that those that pollute the environment should pay. The reason I looked up the latest available figures was because the government offered so little new money to help those in fuel poverty in terms of saving energy and ostensibly, to reduce emissions.

According to The Office for National Statistics, the government collected £35.6bn in environmental taxes, that’s right, billion. This is equivelent to 2.7% of our GDP, a huge number by anyone’s reckoning. But how much did they reinvest? According to the ONS, in 2004, the latest year for which figures are available, the government invested £5.9bn into environmental protection measures. That is just 16.5% of the taxes collected. As we all know, since 2006, there have been further stealth taxes, sold as environmental taxes, which means that the figure collected in likely to surge in 2008, perhaps to £40bn.

How can anyone reconcile the platitudes and rhetoric spouted by this government regarding why we must pay green taxes, when they invest so little of what is collected in terms of green taxes, back into environmental protection measures? Green activists would be right to be angry, but so to should the tax payer, given we have been sucked into believing we were being taxed to the hilt in order that the government could introduce measures to protect the environment for the sake of our children.

The government have claimed that people can save up to 25% on their fuel bills if they follow a few measures in terms of insulation, low energy bulbs etc. Yet when the government told us they were investing £1bn to assist those in fuel poverty, it transpired that £910m was coming from the energy companies and just £90m from the government. This figure should also be considered in context, because the government reduced the Warm Front budget by a similar figure, so in fact their contribution was at best, neutral.

If you are angry, then consider this, our green government reduced spending on measures to prevent the atmosphere and climate change from £313m in 2003 to just £250m in 2004. This is hardly what we would expect from a government that claims to be leading the way. To be fair, the expenditure may have increased in the past 4 years, but as we all know, we cannot believe the figures provided by this government, so we will have to wait until the ONS can tell what the actual figures are. This is because, in case anyone has not noticed (we aren’t supposed to), whenever there is a tax rise, it is immediate, but when there is an investment to be made, we are told the total cost, over a period of years and there is always a delay before it is implemented. For example, “we will spend £900m over the next 10 years, starting from 2011“, you know what I mean. They will then repeat this number, making it sound like new money, every 12 months or so, or when they feel they need good headlines. Sorry, I am prevaricating.

I am not arguing against green taxes, but if they are labeled as environmental taxes, then the money should be reinvested into programmes which help the environment, reduce emissions and improve our planet. To ‘profit’ from this tax insults our intelligence, it devalues the whole green agenda and it demonstrates an indifference by a government claiming to care.

Yet again, Gordon Brown fails to grasp the nettle, coming up with a weak package of measures, that once again, lacks real detail and as always, with any money pledged by this government, it is more ‘jam tomorrow’. If Brown was running a business he would have been fired long ago.

This government claims that they have been “negotiating” with the big six energy companies, if that is the case, why are they having to threaten to legislate to ensure that the energy companies and energy producers cough up the £910m? That notwithstanding, Gordon Brown says “I do not expect the £910m that we raise to be passed on to the consumer by the energy companies“. Really? That sounds like a typical politician’s answer, the statement should have read, “The energy companies will not be permitted to pass on the £910m in the form of higher bills”.

So, let’s sum up, the government says that following negotiations, the energy companies will put up £910m over the next 3 years. But, this is not guaranteed, because the government, by their own admission, may have to legislate to force them and, there is no guarantee that we will not be faced with higher bills as a consequence of this investment. It is estimated that we are already paying an extra £35 per annum for existing energy saving measures employed by the big six. So there is a precedent for passing on the cost. Well done Gordon, great job.

The government have announced that the package is worth £1bn. Okay, lets get this straight shall we? The Warm Front programme has had £250m sliced off its grant, but the government now offer an extra £30m per year over the next 3 years as part of its measures to reduce those suffering from fuel poverty. On this basis, Gordon Brown has announced £910m that he hasn’t got agreement on and put back £90m of the £250m he removed from Warm Front. Where, exactly, is the big news here? Also, does the extra £90m the government are putting in, include the extra winter fuel payments referred to in the same announcement. As they invariably say, whenever Gordon makes an announcement, the devil is in the detail.

It is estimated that the energy companies received their own windfall of some £9bn in the form of free pollution permits under the European Emissions Trading Scheme. Was there no quid pro quo when this was gifted to the energy companies, who agreed this figure?

The government has indicated that they have no wish to legislate regarding energy prices because they believe that competition will result in lower prices. Really, where is the evidence that this is so? The energy companies may raise their prices at different times, but, for the most part, they have all increased their prices more or less in line with the other energy suppliers. This does not look like competition. But regulation is not just about price increases, it is about preventing companies that are in a dominant position, with a product that the consumer needs to buy, abusing their position.

If Ofgem were given the powers through legislation they could prevent the big six energy companies imposing a penal charge on consumers who do not or cannot pay by direct debit. It is estimated that there is a difference of £144 per year between those that pay by direct debit and those using a prepayment meter, of which there are estimated to be 5m. Ofgem claim that it costs £85 per year to run a prepayment meter with 5m in use, this sound extremely unlikely and who’s side are they on anyway? At best, this charge is excessive and undoubtedly, Ofgem demonstrate how gullible they are by accepting this claim at face value. Given some 50% of the people with prepayment meters are likely to be on fixed or low incomes, it is appalling that they should be further penalised by the energy companies, who claim to be helping many of the same people with social tariffs, it really smacks of duplicity.

It is also worth remembering that the European Trading Emissions Scheme is a tax, therefore the government are also profiting from people’s misery. They can tell us until they are blue in the face that they “care”, but whilst they are effectively taxing essential commodities such as heating and lighting they are acting like hypocrite’s. Furthermore, our caring energy companies spend a tiny fraction of their revenues on social tariffs, just £50m per annum.

The bottom line is the initiative put forward by Gordon Brown & co in a very sensible one, certainly preferable to subsidising the fuel bills of those in fuel poverty, year in and year out. However, it is, seriously underfunded and as in commonplace with this government, spread over a long period, which means that some people will have to wait two or three years before they can take advantage of the savings.

As is usual, the opposition parties are, for the most part, silent on this issue. Critical, but offering no tangible solutions. Predictably, Cameron’s conservative party says little of any value, instead of seeing it as an opportunity to demonstrate what they would have done. As I have said before, Cameron doesn’t want to win the election, he just wants Labour to lose it, as they surely will. But it does clearly indicate that Cameron lacks backbone, new ideas, or more likely, both. At least Vince Cable comes up with some suggestions.

The government needs to be far more bold in their approach. They already collect more in green taxes than they invest back in ‘green initiatives’, they should substantially increase the amount of money invested in these energy saving measures, offering to match the energy companies pound for pound. They must also go back to the energy companies and renegotiate the current “agreement”, which needs to be doubled to have any serious impact.

Ofgem should have their powers increased to allow them to cap prices and restrict the energy companies from imposing unreasonable charges such as direct debit penalty payments and high premiums on pre-payment meters. The government should provide an undertaking that a fixed percentage of the income generated in green taxes imposed on the energy companies should be set aside and used for energy efficiency measures. By all means priorotise the most needy, but the government should not exclude everyone else.

The government must introduce legislation which requires the energy companies (producers and suppliers) to invest a minimum amount in infrastructure (based on their turnover), in the same way that the water companies are required to invest in infrastructure. This will avoid a situation where the energy companies can blackmail the government into submission by threatening not to invest in new power stations and so on. The government should investigate the generous £9bn windfall the energy companies received in carbon credits and if it was incorrectly assessed, then the difference should be clawed back. The Competitions Commission must launch an enquiry into competition in the UK market and publish their findings, based on which, the government must legislate if necessary.

The government should not be persuaded to introduce a windfall tax, this is far too crude and serves only to punish. There are other, more subtle ways of dealing with these types of challenges, such as suspending the carbon credits, whilst the initial £9bn is investigated and introducing emergency measures to increase the powers of the regulator. If the energy companies were to face a suspension of the credits they have priced into their share prices, a risk of price caps through the offices’ of the regulator and a Competition Commission enquiry, they will see a fall in their share prices and nothing is guaranteed to make them sit up and listen, than a fall in shareholder value.

This government is happy to fleece, bully and bellow at the people in this country, exercising ever more draconian powers over the individual, yet when it comes to big business, they seem at best impotent and more likely, incompetent and complacent. Come on Gordon, get you act together and fast.

Once again, labour party MP’s are looking to raid the coffers of big business. This time, it is to counteract the economic and social impact of the increase in fuel prices, through the imposition of a so-called “windfall tax”. This is so typical of new labour, if they can’t employ a stealth tax or borrow it, they simply steal it. Yes, how else can you describe a direct raid on the profits of the energy companies?

Now don’t get me wrong, I am not advocating that we take no action, but simply applying a one-off windfall tax is not the answer. This would act as a massive dis-incentive for other international companies considering a move to the UK, assuming there are any left. That notwithstanding, this country faces another potential energy crisis in the next 10 years, or more accurately, an energy shortage and that is because many of our existing power stations are due to be replaced. With a build process of 10 years or so and the delay in the decision to utilise nuclear stations, if the existing companies refuse to invest, we could be in a lot of trouble.

It is possible to make the energy companies pay their fair share, by reducing the substantial windfall they received, as a consequence of the free carbon credits. Energy companies would find it more difficult to argue against this particular aspect of their business that a blatant raid on their profits. It may amount to the same thing, but arguably it is all in the presentation.

Using any money gained simply to reduce people’s bills is also not the answer; it is a short-term fix and would have to be repeated year on year, most likely rising year on year to take account of further rises. This is a massive burden on the taxpayer that would have to fund future shortfalls; after all, the government couldn’t simply turn to the energy company’s year on year.

What is needed is a joined up approach to the problem. Existing government and energy company initiatives need to be extended to put in place a programme designed to reduce the energy usage of those in fuel poverty, rather than simply subsidising energy costs. The introduction of low energy bulbs would make a significant difference to energy costs and if purchased in bulk, would cost the government pennies. This could be completed as a project, much the same as smoke alarms were some years ago. Similarly, looking at more efficient energy use, for example, a modern boiler will often use 35% or more, less fuel than an old one. I know the government already has a programme in place, but why not expand it, put more money into this initiative, rather than subsidise bills every year.

We all know of the various, well publicised methods of reducing home energy usage, most experts have suggested that there could be a saving of as much as 35% on annual bills, with a the adoption of commonsense approach to usage and a relatively small, targeted investment. Given the exponential savings in so called greenhouse gases, perhaps the government could consider transferring some of the revenues’ gained from ‘green taxes’ directly into this project.

I don’t have all the answers and I am neither an expert on energy nor the carbon trading scheme, but I know this, we cannot afford to introduce an ongoing form of fuel subsidy for those in fuel poverty and not expect it to hurt the majority. Surely it is better to invest a larger amount of money now, in fuel saving measures, rather than fuel subsidies? The government does not need to employ expensive consultants to come up with a commonsense approach to this problem. I don’t have all the answers and my suggestions may be over simplistic, but then I won’t cost the government hundreds of millions of pounds of taxpayer’s money in consulting fees either.