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Weekend reading: It’s time to stop paying and pacifying polluters

Weekend reading: It’s time to stop paying and pacifying polluters post image

What caught my eye this week.

They say you should never let a crisis go to waste. But in his Spring Statement Chancellor Rishi Sunak blew it with two crises at once.

Cutting fuel duty was a small, pointlessly populist move. Both the cost and consequences are pretty modest in the grand scheme of things.

But the message it sends is dire.

The cost of a cut

The AA reckons only half the fuel duty cut will be passed on to motorists. What’s left won’t make much difference to many households.

Maybe £100 a year saved on average for a one-car family.

The people and businesses who burn a lot of fuel driving will of course save more. But they are exactly the ones that the tax system should be nudging towards alternatives.

You might say the cost of living crisis is an emergency. Well let’s remember that only six months ago the UN dubbed the latest nightmare IPCC report on climate change ‘Code Red for Humanity’.

The scientific consensus is that burning fossil fuels is heating the planet. And while there’s more debate about the size and scale of the consequences, the precautionary principle should have us acting to reduce this warming at every turn.

The surging price of gas and oil is a perfect casus belli to put Britain on the kind of war footing required to remake us into a low-carbon economy.

That is ultimately what will best preserve our standard of living and prosperity.

Instead Sunak subsidises more fossil fuel burning to cheers from MPs.

Paying for Putin

I know a few Barry Blimps out there imagine themselves to be bold contrarians by refuting climate science.

Well whatever – because today even they have a glaring reason not to be encouraging the burning of more fossil fuels.

Obviously I’m talking about Russian’s war with Ukraine.

At the same time as taking unprecedented economic action against Putin’s kleptocracy, Europe is paying up to $1 billion a day for Russian fossil fuels.

This money props up the regime and the war. We’re not so much talking good cop / bad cop as a bad cop / whisk the prisoner away for a luxury weekend in Dubai cop.

This reliance should have been dialed back years ago. The second best time is now.

Unlike Europe, Britain gets little of its oil or gas directly from Russia. But it’s not nothing – about 3-5% of gas and 6-8% of crude oil. So our hands are not clean. Some of your pounds at the pump go to Putin.

Still, it’s little enough that we could credibly attempt to slash what we spend on Russian fossil fuels to zero, fast.

Take back control

Lopping even the maximum 5p fuel duty cut off a litre of petrol costing £1.65 represents about a 3% saving.

Would it have been so onerous to ask motorists to skip one trip out of 30, or to pursue some other fuel saving measure instead? I don’t think so.

Yes, the sums are relatively trivial. What matters more is the signal.

If we’re to tackle climate change without putting on the hair shirts some argue it’s already too late for, every decision must be the right one. A public gullible enough to vote for Brexit cannot be told this transition will be cost-less and painless. They will bridle at every new initiative.

Professional wrong-man Nigel Farage is already waiting in the wings with his next self-destructive campaign – a referendum to abandon our climate goals.

Farage might dream of the waters of the Straits of Dover rising. But anyone with kids – or a passing interest in the future of humanity – shouldn’t tolerate his bullshit twice.

I happen to agree that in the long-term – as Boris Johnson said recently“green electricity isn’t just better for the environment, it’s better for your bank balance.”

But in the medium-term it will be a costly and disruptive transition. We need to take this seriously. The public must know there’s work to do and a bill to pay. As many as possible must buy into it.

To quote the UN Secretary-General again, the knee-jerk rush for alternative fossil fuels in response to the Russia-Ukraine war is “madness” that will derail our already-insufficient climate goals.

It’s no surprise to see a man with Johnson’s moral compass dash off to to Saudi Arabia to seek to replace one murderous autocrat with another.

But as a nation we must do better.

Where’s my tax cut?

Around this point somebody is typing a comment saying that living in my ivory tower – um, in a two-bed flat in a London suburb – I don’t get the pressure the average person faces due to inflation.

Never mind that I read and link every weekend to various articles about exactly these pressures.

I’ll just conclude by pointing out that the fuel duty cut isn’t even fair by that measure.

Many people don’t drive. So they won’t benefit directly from a fuel duty cut. But they’ll pay for it via taxes.

Many people can cut back on non-essential driving. They can’t cut back on, I don’t know, food. Yet they’ll pay for the fuel duty cut for motorists.

The fuel duty cut is a specific tax break for an activity that threatens our financial future due to climate change – and maybe even our corporal one given the worst-case scenario from Russia.

Fuel rationing via a national speed limit or driving curfews or surcharges would have been fairer.

Alternatively, the money spent on cutting fuel duty could have gone instead on free public transport.

Then again much of the country is less well-served than London by public transport – another problem to fix, not a reason to support fossil fuel subsidies – so perhaps Sunak could have just sent everyone a cheque for their share of the £2.4bn cost of his fuel duty cut?

That way we could each ease the pressure on our finances however we saw fit.

Have a great weekend.

From Monevator

Is your early retirement under threat from an unlucky sequence of returns? – Monevator

How to estimate care home costs – Monevator

From the archive-ator: Money is power – Monevator

News

Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!1

Spring Statement: what it means for your money – Which

Spring Statement: what’s in it for investors and householders? [Search result]FT

Spring Statement: personal calculator – Guardian

Spring Statement: 12 nasty details hidden in the small print – The Mirror

People face the biggest drop in living standards since 1956 – BBC

Goldman Sachs sees rising recession risks – ThisIsMoney

Weekly Covid cases increase by 1m in UK, figures show – Guardian

Next boss sees its prices rising 8% in second half of the year – ThisIsMoney

Buffett’s Berkshire Hathaway to buy insurer Alleghany for $11.6bn – CNBC

Strange things are afoot at the London Metal Exchange – Front Month

Products and services

Read your energy meter on 31 March, just before prices rise – Guardian

Are vampire electrical devices sucking cash from your bank account? – ThisIsMoney

How to get the best deals on 90% and 95% mortgages as a first-time buyer – Which

Open a SIPP with Interactive Investor and pay no SIPP fee for six months. Terms apply – Interactive Investor

UK green savings bond sales ‘underwhelming’ [Search result]FT

The economics of installing solar panels – ThisIsMoney

Price of ASDA pasta surges 56% as supermarket inflation bites – ThisIsMoney

Homes with glorious spring gardens, in pictures – Guardian

Getting to index funds the hard way mini-special

One man’s long road to passive investing peace – Humble Dollar

How I lost $150,000 in a day – Young Money

Comment and opinion

The Great Resignation might be followed by the Great Regret… – Guardian

…though millennials are apparently still rethinking work – Guardian

Which bond types provide the most diversification benefit? [US but relevant]Morningstar

10 simple tips for better investing – Peter Lazaroff

When the optimists are too pessimistic – Of Dollars and Data

Chinese stocks: the road to nowhere – Morningstar

When is the right time to retire? – The Evidence-based Investor

What happens when you buy stocks in a bear market – A Wealth of Common Sense

Pain and pleasure – Banker on FIRE

Afford Anything with Paula Pant [Podcast]White Coat Investor

How to manage finances and romance after 50 – ThinkAdvisor

What to do during a recession: a timeless strategy – Darius Foroux

Buy what you value – Humble Dollar

Crypt o’ crypto

Multicoin Capital may be the best performing VC fund of all time – The Generalist

Inside the bubble – Seth Godin

Naughty corner: Active antics

Via negativa: what should fund investors not do? – Behavioural Investment

Russia in Ukraine: let loose the dogs of war – Musings on Markets

Keeping it simple in VC – Fred Wilson

The case for quality stocks [Podcast]Morningstar

Factors do work, but don’t try to time them – The Evidence-based Investor

Kindle book bargains

No Spin: My Autobiography by Shane Warne – £0.99 on Kindle

Posh Boys: How English Public Schools Ruin Britain by Robert Verkaik – £0.99 on Kindle

Poverty Safari: Understanding the Anger of Britain’s Underclass by Darren McGarvey – £0.99 on Kindle

Hacking Growth: How Today’s Fastest-Growing Companies Drive Breakout Success by Sean Ellis and Morgan Brown – £0.99 on Kindle

Environmental factors

IPCC scientists to examine carbon removal in key report – BBC

Checking in with the iShares Global Clean Energy ETF – DIY Investor UK

It’s currently far cheaper to charge an electric vehicle than buy gas in America – CNBC

Carbon risks and credit spreads – Klement on Investing

Off our beat

How people think – Morgan Housel

The Russians fleeing Putin’s wartime crackdown – The New Yorker

Covid success to Covid disaster: what happened in Hong Kong? – Grid

Memento Millennial – Ayesha A. Saddiqi

And finally…

“You don’t see something until you have the right metaphor to let you perceive it.”
– James Gleick, Chaos: Making a New Science

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{ 59 comments… add one }
  • 1 xxd09 March 26, 2022, 12:06 pm

    Wonderful rant to start the week with some great facts to worry us all!
    Watching the evolving situation from far in the frozen North (where most of UK wind power (plus oil )comes from) is enlightening
    Reality was always going to put humans back in their place with a vengeance-it was just unknown what form it would take
    Brexit followed by Covid followed by war seems to fit the usual human capability for ineptitude and by default for a return to back to basics-what ever that is?
    Amongst other things…….
    Intriguing to see the gender roles re establishing themselves with a war
    Men (expendable)fight -Women (not expendable)support them from a safe distance with their children
    Where are the Amazon when you need them?
    As for investing I am sitting tight AGAIN with my set asset allocation of 3 index funds only( in place for many years now)
    Watching the more normal chaos that is human existence return in full force!
    xxd09

  • 2 BuildBackBetter March 26, 2022, 12:23 pm
  • 3 tom_grlla March 26, 2022, 1:09 pm

    Good to have lots of different perspectives.

    A ‘metropolitan liberal’ part of me sympathises & agrees with you. But another part of me thinks of the old Mungerism “Show me the incentive and I will show you the outcome.” which isn’t quite right, but by which I mean, I suspect you have written this as a non-driver.

    If you e.g. a) live in the country, b) have to cart small kids around, then driving is quite important to you, and if you c) haven’t got a financial cushion from your investment profits, then reducing the cost of driving is important.

    I used to be more typically ‘green’ & ESG-like. But in the past year I’ve heard some fascinating stuff from Energy people like Helen Thompson, who did a great talk at the last Capital Gearing day.

    As I recall, it was about how the demand for oil will keep growing, including for non-fuel usage (i.e. plastics etc.) and that the supply of renewables just isn’t sufficient yet to replace fossil fuels. i.e. We need to be practical about the need for fossil fuels UNTIL the supply (& efficiency) of renewables has increased.

    I know I’m drifting off-topic now (& writing off the top off my head), because this leads to then investing in Energy, which has obviously been more profitable than Tech/Growth in the past 12 months. And this – if you want to try and be a ‘good green’ means trying to work out how are the most ‘ESG’ Energy cos, who are working on efficiency & minimising their environmental impact.

  • 4 Jonathan B March 26, 2022, 1:25 pm

    I agree with your analysis. Sanctions on Russia wouldn’t be meaningful if they didn’t impact the UK public, so Sunak’s job was how to deal with that. The way I see it, it should have been two-fold.

    First he needed to find a fast way of helping the poorest off for whom increased energy and fuel prices simply can’t be budgeted for; he was able to come up at short notice with furlough and business loans when Covid struck so that could have been done.

    Second he needed to inject urgent money into reducing our dependence on fuel, with the aim of both eliminating use of Russia as a supplier and accelerating the transition to non-fossil-fuel alternatives that will be more sustainable longterm (both in terms of supply politics and reducing CO2 emissions). He could have given an immediate boost to the alternatives to private fuel use. Outside London public transport is too expensive and has too poor a service to meet most people’s needs, immediate price subsidies and investment in improving services is the way to get people out of cars. Plus electrification to the huge parts of the rail network it still hasn’t reached after fifty years, allowing non-fossil power to be exploited more for transport.

  • 5 Anne March 26, 2022, 1:26 pm

    > Would it have been so onerous to ask motorists to skip one trip out of 30

    Sure. That’s one day out of 6 weeks where I don’t go to work. And there is one less doctor at the hospital.

    I find suggestions like this, while well meaning, are generally created by people who don’t need to use cars on a regular basis or live in a large city with reasonable public transport. And they can’t understand why everyone else doesn’t live the same way too. It’s a slippery slope argument and not sound.

    Take it further and you have “personal choice elevated to moral imperative” – because I can cut back my car usage 1 day in 30, everyone else should too, right? Careful now where that goes…

  • 6 The Investor March 26, 2022, 1:28 pm

    @tom_grlla — Afternoon! You write:

    If you e.g. a) live in the country, b) have to cart small kids around, then driving is quite important to you, and if you c) haven’t got a financial cushion from your investment profits, then reducing the cost of driving is important.

    Nobody disputes it costs money to drive around and the price has gone up.

    But to my third reason (it’s unfair) why should these people get extra help compared to say a struggling inner city family who just saw their heating bill double or their shopping go up 25%?

    Remember this isn’t magic money. It comes from all of us (taxpayers) and goes to some of us (drivers). You mention incentives. Why are we incentivizing more driving?

    As I say why not just send £100 to everyone instead as a cost of living subsidy?

    I can see some case for cutting the cost for industry/haulage. But even there we’re putting a sticking plaster on an incentive (higher cost, lower margins) that could ultimately instead be directing money, resources, and scale towards e.g. large-scale electric EV delivery (already Amazon does this in London, perhaps elsewhere) and overhauling the grid.

    We know we need to get there. It gets easier the more of us do it and at more scale (because building 10 million electric cars or 50,000 electric windmills is vastly cheaper than building 1 million or 10,000).

    Let’s get on with it. 🙂

  • 7 The Investor March 26, 2022, 1:31 pm

    @Anne — Again, why should I directly subsidise your trip to work when the cost of living increases are broad and universal? (Versus say Covid furlough, where some of us could keep working from home and for some that was impossible, and hence targeted aid makes sense).

    Are drivers going to send me some money to pay for my next and more expensive laptop that I need to do my work? 🙂

    I won’t keep stating the same thing, if others make the same point. Obviously we have different views but I think my argument is fairly unassailable.

    It’s a political and counter-productive sop, not a logical response, especially given the direction of travel we need to be going.

  • 8 Gentleman's Family Finances March 26, 2022, 1:35 pm

    Great article and it is exactly as I’ve been saying recently both in my blog and to anyone that’ll listen.
    Better written by you of course and with a bigger readership certainly.

    The 5p bung is a disgrace – much like the cut to air passenger duty. But it’s an appeal to motorclass potential Tory voters and even if it is largely tokenistic, it sends out a very clear message.

    In Scotland there is free bus travel for 5- 22 year olds at an estimated cost if around £134m a year. For a UK wide scheme say £1.5b – round it up to £2b to be conservative.
    That could have been introduced instead of the 5p / £5billion pound cut to motorists.

  • 9 Rui N. March 26, 2022, 2:04 pm

    @Anne, nice strawman you got there. If you only use the car to go to work, no one would think to ask to curtail that. The ideas about asking people to curtail X number of trips relate to trips that can be avoided (walk to the coffee shop once in a while, combine shopping trips, etc.). Like the US used to say in WWII (paraphrasing here): “whenever you make an unnecessary automobile trip, Hitler is with you on the car”. In this case it’s Putin and your future suffering descendants.

  • 10 Neverland March 26, 2022, 3:06 pm

    Plus ca change, plus cest la meme chose

    I remember in 2007 Ken Livingstone wanted to put an extra congestion charge on SUVs and the outraged burghers of the London suburbs voted one B Johnson in as mayor of london

    What people say they want and what they are willing to pay for are two different things

    @Investor – is this going to change the way you vote?

  • 11 Xenobyte March 26, 2022, 3:58 pm

    Wow! This article really shows how the green agenda is for those living comfortably in the world.

    We have two small cars, petrol, 10-13 years old, 100-120,000 miles on the clock. Our disposable income is limited. We can’t afford a new car. We don’t live in the city so using public transport for work is not feasible. Our elderly parents live alone, 60 and 600 Km away (EU) in non-metropolitan areas. Again, public transport is not feasible. For all of us our only sources of heating are natural gas and oil. As prices increase, our disposable income decreases. How on earth are we supposed to buy expensive electric cars, heat pumps, solar panels or whatever when energy prices and other subsistence expenses eat into our income? What is the single solution that could help people like us right now?

    The attitude of those promoting the Green agenda is reminiscent of the Brexit debacle, where the EU was dismissing of those people raising their concerns. From April, a lot of people are going to be struggling. Its going to be worse after October. People are going to suffer and they need a quick solution. The Green lobby needs to ease up on its ideology for now, otherwise the likes of Farage will be embracing the masses with open arms.

  • 12 Neverland March 26, 2022, 5:11 pm

    @xenobyte

    The other argument is that the rise in the cost of hydrocarbons and food is a useful price signal to change your lifestyle

    If 2.5 bn Chinese and Indians lived like you I’m pretty sure we would have global warming on a catastrophic scale

  • 13 xeny March 26, 2022, 5:26 pm

    @Xenobyte:
    >People are going to suffer and they need a quick solution

    I’m not certain there is a good one. Hydrocarbons are traded in an international market, and the price is essentially an indication of tightness of supply. I think it’s also slightly short sighted to blame the green agenda:https://www.simplyswitch.com/camerons-cuts-to-green-programmes-now-adding-150-to-energy-bills/ . Cameron cutting green investment is now adding to household energy bills.

  • 14 trufflehunt March 26, 2022, 5:55 pm

    @Zenobyte
    I’m 70 years old. I run a small car, 15 years old, of 103,000 miles. I cannot afford a new car. I don’t live in a city. I live in a rural area, in a small town of 2500 persons. Really it’s a large village, but by quirk of history it’s a town.

    I wouldn’t want to live in a city. And particularly not the City. I wouldn’t want a new car. Of about 40+ cars that have passed through my life over 45+ years of driving, 2 have been new. New cars are a waste of money. And once that ‘new car’ smell has dissipated after a few weeks, they’re just another car. My 103,000 mile car gives me 54 mpg running around.

    My source of heating is electricity only. I very much support the Green agenda. In the mid-1980’s, I worked in Borneo. Once, I and a number of friends rafted down a jungle river. We chopped down some cane, and fashioned a couple of rafts from those and half a dozen JCB tyres. We then proceeded down a foaming torrent for several miles. After a while, the river ( Padas ) widened out, and slowed. Shortly, we smelt smoke. There had been logging done here. We drifted through, smoke, silence. All the jungle creatures had fried, or fled. That memory has stuck with me, though the other points of that trip have faded. It all seemed wrong.
    Similarly, I did some work in Ireland in that era. Based in Dublin, at weekends I’d head off into the central parts of the country. I’d find vast areas being basically strip-mined of peat to supply the power stations. To me, this was a long way from Highland villages where peat was dug for a family’s subsistance use.

    Yes, I support the Green agenda. I’ve sought out the best deals for renewable energy for lots of years now. As of about 18 months ago, I was convinced that inflation was on its way, and over the past year, I’ve pumped money into my electricity account as a major buffer aginst what is coming.

    I eat healthily. Plenty of fruit and vegetables. They’re cheap. 8 bananas for £1.10 at Sainsbury’s. Packet of frozen spinach £1.20 at Waitrose. Brussels sprouts, £0.70. When you start looking closely at what is on supermarket shelves, you gradually realise that there is a huge amount of stuff that is basically cr*p, it would barely qualify as food. ( ref. Michael Pollan.. “.. eat only what your grandmother would define as food..”

    I walk several miles a day. I’ve cut out the lazy, convenient, uses of the car. If it’s less than a mile, the car stays exactly where it’s sat.

    I have one pension. It’s the State Pension. I buy almost all my clothes second hand. This enables me to buy high quality, originally expensive, clothing that lasts. Right now, the only whing I’ve got on that was new, is my underwear. I mean, let’s face it, the thought of aring something that has had someone else, er, skid marks on it is a no no.

    Overall, from my chosen lifestyle, I manage to save and invest. Not remotely at the scale of what often appears here, but I do manage it. Regularly, and steadily, each month, into passive index funds.

    I think what I’m trying to say, Xenobyte.., what’s the problem ?

  • 15 ermine March 26, 2022, 6:06 pm

    > the precautionary principle should have us acting to reduce this warming at every turn.

    That ship has sailed. Five years ago the Institute of Physics did a report on individual actions or more to the point inactions you can take to reduce your impact on climate change. Somehow we all ended up talking about going vegan and electric cars, studiously ignoring lifestyle changes that dominated those things by an order of magnitude.

  • 16 David March 26, 2022, 8:30 pm

    The 5p per litre cut only saves about £3 when you fill the tank of an average car. Even if you fill up once a week that’s a tiny tax cut. And you still pay way more in VAT than you did a few months ago because that 20% is still going to get added to every increase in prices at the pump. So if the Chancellor has sent a message that he’s helping motorists, he’s managed to do it without actually doing very much. I think it’s also time limited for 12 months?

    Meanwhile, the benefit in kind on zero emission cars is currently 0%, rising to 1% and then 2% over the next couple of years (it’s between 15%-37% on non electric cars). Combine that with a salary sacrifice scheme and that’s an enormous tax subsidy for the rich to stop using petrol or diesel cars altogether.

    Another announcement this week was the reduction to 0% VAT on energy saving projects like insulation, solar panels and heat pumps. That’s going to save richer homeowners who decide to invest in those measures a lot more money than the 5p cut to fuel duty saves anyone.

    Tax will never be fair – the poorest don’t drive cars at all, and their benefits aren’t being increased by anything like the inflation rate from next month. The cost of living is surely going to dominate politics for the next few years. But you have to remember that a tiny proportion of the electorate decide who wins elections. Basically Mondeo Man in a few dozen marginal constituencies in places like Essex and parts of the Midlands. These are people who don’t want to hear the truth about how much it’s going to cost them to transition to renewable energy.

  • 17 Griff March 26, 2022, 9:33 pm

    Well sorry if it upsets the monevator love in but I quite like Farage, I also voted Brexit, sick to the back teeth of the green agenda and sick of paying for it.

  • 18 Weenie March 26, 2022, 9:37 pm

    The vaccination rollout in Hong Kong has been a disaster – my dad has only just had his first jab after the government realised they needed to do something to halt all the old folk from dying of Covid… They did nothing to dismiss vaccine concerns so oldies weren’t encouraged to get it, and thought zero-Covid policy would keep them safe. That they’ve still got lockdowns two years later is just unfathomable.

  • 19 Jonathan B March 26, 2022, 9:45 pm

    @Weenie, Hong Kong is a sad story as recounted in one of the links.

    People seem to think Omicron is a “mild” variant. The experts say it is not milder than the original Covid strain, its effects only look mild in populations which are largely vaccinated or otherwise have immunity. In Hong Kong it is deadly.

    And previous experience suggests another variant will appear in due course.

  • 20 Fremantle March 26, 2022, 11:37 pm

    Renewables is very carbon intensive when you consider all the steel and concrete required. Then you have the energy storage problem both for transport and for supply security. Batteries are made of rare minerals that largely are supplied from other morally challenging nations.

    Subsidising renewables does tend to benefit the better off. Heavier hybrids and longer range EVs still cause pollution from particulates that come from increased the wear. The roads they travel on need to be funded. Whilst fuel duty is just a part of general revenue, as you’ve pointed out, the reduction in registration fees and congestion charges for EVs is also a bung.

  • 21 Jonathan B March 26, 2022, 11:43 pm

    @Fremantle, I agree but are the capital carbon costs of renewables actually very much higher than those of new fossil fuel power stations? I suspect in both cases we don’t sufficiently assess the lifetime impact.

    Ditto EVs, it is almost certainly more carbon efficient to continue to use a petrol car until it can’t be kept running than scrap it to buy one powered by batteries.

  • 22 JimJim March 27, 2022, 7:04 am

    We live in the remote north, we need, at the moment 2 cars or a house move (we don’t want to move, I’m sure most Londoners feel the same), we have poor public transport and yes , the price of fuel is showing up in our bank statements but. And it is a big but, if this is what it takes to move us toward a low carbon economy, bring it on and don’t try to mess with the economic reality of it.
    Our cars celebrate their 14th and 16th birthdays this year and are no where near as efficient as perhaps they should be, still we mitigate this cost by planning trips to be multi-purpose where possible and in the reduced depreciation (actually, appreciation in the last couple of years!).
    I feel more for the lower waged workers where I work who have not seen an increase in the 45p/25p for newer cars mileage allowance. It equates to a wage cut for them for necessary mileage that is beyond their control.
    As for Boris’ wind farm in my back yard, again, something that Londoners are unlikely to see unless they take a train out to the Stix, why not just go all out on offshore wind? We have a huge offshore farm here (was the biggest in the world for a bit) and barely notice it unless the weather is crystal clear, even then it is not a disturbance. We also live about a mile away from onshore wind and you can hear that whining awfully when we get easterlies. One wonders how many of his Eton chums own land that might benefit from a few whizzamigigs???
    As we are on a war footing, perhaps it is time for the legendary ingenuity of the Brits to shine through and achieve forward progress on tackling climate change and less dependency on gas and oil. We dug for victory in WW2 and ate rations until the 50’s (My granny kept her ration books just in case it ever came back). I am sure that we could forgo the latest Iphone every two years and a few trips abroad to make the world a more secure place in every respect for our children
    Rant over,
    Off to do the garden ready for the growing season.
    JimJim

  • 23 Ryan Gibson March 27, 2022, 7:14 am

    @Anne You have completely missed the point made throughout the article. Nobody is saying you cannot drive to work. People are merely saying if those small journeys for pints of milk are done via other means (walking, cycling) then it will have a real impact.

    Active travel data here https://publications.parliament.uk/pa/cm201719/cmselect/cmtrans/1487/148705.htm

    The vast majority of journeys over a mile are made in a car or van—even for distances of 1–2 miles over 60% of journeys were made by motor vehicle.

    That’s a completely and utterly insane statistic which needs to change. There are some real technological improvements to make this far easier for those of all ages. Electric bikes make cycling (for those able-bodied) a possibility into their senior years. Cargo bikes enable families to transport children and goods without the need for a car. As Ernie rightly said these are simple lifestyle changes that would improve the quality of life of many.

    As a country however we have become so dependent upon cars that people are unable to see how destructive it has become.

    Needs to change but nobody is saying people who need to work can not do so and can’t commute by car. It’s the rest of the crap we need to reduce.

  • 24 Green as grass March 27, 2022, 7:27 am

    The author of this article is preposterously out of touch with life in the real world. He will protest that he is very much in touch with life in the real world, probably until he is blue in the face, but it’s just laughable. This is why the replies section is a mixture of disbelief from those whose lives are not so comfortable cushioned as his and approving hot air from those whose are.

  • 25 Jim March 27, 2022, 7:35 am

    Can anyone explain to me the media coverage of the Beijing winter Olympics? We had articles pointing out that the snow was mostly artificial, giving the impression global warming was responsible. I also found numerous articles whereby athletes were complaining of the bitter cold temperatures and cross country skiing races were being shortened in distance to reduce exposure!?

  • 26 Jon March 27, 2022, 8:13 am

    What are the economics around strategically moving the tax-emphasis from income to spend? Therefore a conceptual shift a bit more in the direction of wealth taxing, by the surrogate of ‘ability to buy more stuff’..
    For example, and using somewhat random figures, cut income tax to zero for up to 40k income. And instead, increase VAT by a large amount – up to 30% say, if that broadly would balance the treasury’s books.
    Loads of “yeah, but…..” scenarios, of course. But in principle, does this concept
    Stand up to any economic sense?

  • 27 Ryan March 27, 2022, 10:08 am

    Let’s read your perspective then @Green as grass as you’ve offered nothing constructive to the conversation.

    Irrespective of your thoughts on climate change helping drivers with fuel cuts over other things (food, heating etc) is a weak, pointless act.

    Look forward to reading your insight.

  • 28 The Investor March 27, 2022, 11:15 am

    @Ryan @all — It’s not worth debating with @GreenasGrass, he’s a hardcore Brexiteer of the ‘impervious to facts’ variety, sadly.

    There are obviously some smart Brexit supporters, almost invariably those who had constitutional concerns, but so many of them are just relentlessly wrong.

    They were wrong about Brexit economics. Then they moved on to Covid denial and lockdown protests. Now they’ve rolled themselves into denying climate change and the need for remedial action — an existential threat not just to our ability to enjoy a pleasant life with our European neighbours or to reduce the deaths of old people, but literally for the future of humanity.

    What all these threads have in common is that experts with genuine knowledge are dismissed as ‘fear mongers’ by people whose grasp of the evidence seems extremely shaky to deliberately perverse.

    It’s quite incredible. It’s almost as if the intelligent progress of the species is being mutated out by the emergence of wilful obtuseness, the way bed bugs eventually become immune to pesticides.

    I don’t know what can be done about it in a democracy. It’s very troubling. I had put it down to nationalism with Brexit but now we’ve seen it with two other fields. Again, where the evidence is overwhelming but they don’t understand it or refute it on principle.

    (i.e. It’s not like a debate between Labour and the Tories in the old days, about the nuance around how policy worked or similar. It’s more like a religious war.)

    Or maybe a large number are all Russian bots, who knows.

  • 29 platformer March 27, 2022, 11:52 am

    Climate change has become a total mess of an issue. This should be no surprise given the problem is so ill defined and the ‘solution’ even more so.

    It is concerning how sympathetic the reasonable person can be towards the apocalyptic environmentalism types (e.g. Extinction Rebellion). Nobody serious is suggesting anything like extinction as a result of climate change.

    These are not people concerned with productive discourse with the aim of collaboratively solving a very difficult issue. They are ideologues whose views are wrapped in an anti-capitalist and misanthropic world view which can be entirely contrary to their stated aims (e.g. hatred towards nuclear power).

    If your ‘why’ is non-extinction you can justify any ‘how’ which is a dangerous place to be, especially when you claim to preach from a position of virtue. Just read Greta Thunberg’s “How dare you” speech and ask how we’ve allowed these types of empty diatribes to be taken seriously.

    Then you move to the vast majority of more reasonable types. But the solutions are not clear. What is clear is just telling people to consume less is not a solution. If you put limits on economic development it is not the rich who suffer. There are arguments that say we should allow developing countries to burn more fossil fuels now so they become richer quicker and reduce emissions in the long-run.

    And are we even sure that of all the issues we have, prioritising climate change is the right one to maximise human flourishing? The Copenhagen Consensus has done some great work on this and addressing climate change is low on the list: https://www.copenhagenconsensus.com/post-2015-consensus.

    I’d also suggest reducing interdependencies between countries is no great achievement as it substantially increases the risk of war which is by far the worst possible outcome.

  • 30 xxd09 March 27, 2022, 12:04 pm

    Good points but………
    Democracies have always been troubling and deeply annoying because of open debate and free speech
    Other people have sincerely held different points of view from oneself-different religious beliefs etc etc
    Scientists are no less susceptible to this democratic situation
    Science last I heard proceeds on “hypotheses ” only (not truths) which are right till they are proved wrong and on it goes
    The “Holy Grail “ of scientific truth is in fact a moving target!
    In totalitarian states like Russia and China this is not a problem-the state is alway right and there is only one point of view enforced by prison and psychiatric units
    I presume none of us want to go down that road!
    Probably we just have to grind our teeth,be polite, no denigration of opponents……
    and just carry on
    The alternatives do not bare thinking about
    PS I thought Boris played a blinder getting us all vaccinated so quickly and supplying the Ukrainians speedily (with the Americans)with effective anti tank weapons
    Probably couldn’t have been done so speedily or at all if we were still in the EU
    (Do the Germans have any weapons at all?)
    Just a point of view -sincerely held!
    xxd09

  • 31 Prometheus1 March 27, 2022, 12:08 pm

    Laudable sentiments, however we get the politics we are prepared to accept.

    In this case when the majority realise something needs to change then it will. Of course that won’t happen until, as is often the case, it [climate change] is far, far worse….

    Populism is a denial of reality. Reality will bite back….

  • 32 Seeking Fire March 27, 2022, 4:01 pm

    @15 Ermine. That’s a great link. It supports my thinking that without consciously realising it, western populations are starting to implement policies that will have hugely positive implications for the environment in future generations. i.e. the number of children being born is below replacement for the wider population. Japan has been at it for years, Russia is going that way too, ditto Germany and also the UK if we were closed to immigration. A number of countries have tried to stimulate births without success.

    As David Attenborough said, we must control our population to maintain our quality of life. If the UK and other countries manage to implement policies to achieve next zero emissions by 2050, it’s hardly going to make life cheaper. Accordingly people are likely to continue to have less children reducing our future population (growth or absolute). Myself, I believe that’s a good thing. It will require huge reorganisation of our society particularly as our overall skin colour increasingly changes given all the population growth will be in Africa and parts of Asia. China is forecast to see massive population declines in future decades – again I think that’s great news.

    At the moment, the best thing people can do to reduce their impact on climate change is not to have any children. Spoiler – I do, not telling people not to have children here…..!

    I (obviously) believe in the evidence on climate. Equally, the UK in terms of emissions will be a bit part player at best in the future. By way of example – London has a population of circa 8.5m, by 2100 that’s estimated to be at 9.5m. Lagos currently has a population of 15.8m by 2100 thats estimated to be at 88.5m. That’s not say we in the UK shouldn’t play our part just that whether climate change is mitigated or not won’t be primarily decided in the UK beyond our ability to contribute to advances in technology.

    So I have mixed views on impoverishing poor people further with climate change taxes on energy for example. Myself, I think the changes in climate are all going to happen with corresponding impacts on humanity. Our best bet in the UK is to prepare for that- I appreciate that might seem a negative approach. Never going to happen given we couldn’t even stock enough PPE on the off chance a virus might happen! Voters aren’t interested and who can blame them.

    Looks like for Ermine’s link that the average person in the US needs to reduce emissions from 16tonnes of Co2 to 2tonnes of Co2. Either the technology better pick up the slack, or it’s never going to happen, or people need to fundamental change their lives. Myself, I think it’s never going to happen!

    With taxes at their highest since the 2nd world war, public services still massively underfunded, an ageing population and living standards apparently falling this year quite a bit – there doesn’t seem much scope to start charging people more for climate change policies. Mind you, I’d love to see the price of short haul air travel triple to reflect the Co2 impact. The next time some celebrity or frankly anyone waffles on at you about climate change, ask them how many flights they’ve taken in the last few year or how many kids they’ve got. If it’s more than you – press their mute button.

  • 33 xxd09 March 27, 2022, 5:27 pm

    Having less kids is an understandable solution-China is in the process of just ending a 3 generational implementation of such a policy
    Interesting how only a totalitarian state could successfully implement such a policy
    Does this say anything about the mindset of certain posters here?
    Anyone with a statistical bent can work out the end result of such a policy-drama does not even begin to describe the end results
    Sadly the authorities now asking the girls to have more kids isn’t working and along with selective abortion of females -the end point can be imagined
    In our sort of free society something the same is happening for different reasons -50% of women in Britain have no children(Guardian)
    Controlling populations(Chinese) or leaving it to environmental forces (Animal populations +Britain)leads to the same end result- population collapse with all the subsequent unpleasant consequences
    Collapsed cultures who don’t value their kids (look what we did to kids and schools in Covid) are usually replaced by a people and culture that do
    Historically this has happened many times
    Rome fell because it ran out of Romans
    Be careful what you wish for!
    xxd09

  • 34 Naeclue March 27, 2022, 6:36 pm

    If I did lot of miles in a car I would make sure I had one as fuel efficient as I could. In fact, our current car, is a reasonable sized family car, 7 years old and only emits 115g/km. I have little sympathy for anyone complaining about fuel prices if they run round in an enormous 4X4 or a family car they absolutely must be able to do 0-60 in a couple of seconds faster than they would be able to had they chosen a more fuel efficient engine.

  • 35 random coder March 28, 2022, 3:36 am

    As a finance blog I always find posts that end up in areas directly or indirectly related to global warming and related matters, very interesting.

    Many of the best ways to save money happen to be ‘green’. Even for people that don’t believe in climate being a threat, getting proper insulation and/or topping up loft insulation is probably the best thing most people could do to make their house warmer and cheaper to heat. Similarly, a few LED bulbs and use of basic heating controls for anyone that has them leads to even more savings.

    Seeking financial independence leads to generally green behaviours and actions. A few exceptions do exist (the cost of some public transport routes are becoming so bad that a car wins cost wise…), but on the whole, living an efficient lifestyle that keeps costs down generally requires reduction in carbon footprints.

    The energy crisis as it is now being called is probably the wake up call we all need and hopefully even after it calms down, most of the green changes made for efficiency and cost reduction reasons will remain.

    Covid demonstrated that a worldwide crisis can be pretty much solved or at least mitigated with concerted effort. Maybe it is time to seriously move to green energy sources (or at least get off high carbon sources) before it becomes a real crisis. In 20-30 years from now, we will not be able to say we never were warned about this potential crisis.

    Not convinved reducing fuel duties is a good look, and many of the people most exposed to energy cost increases would be better served by free property insulation (e.g. pensioners living on state pension, as well as the unemployed). I have no problem paying more taxes to contribute to win-win policies that keep living costs low and as a by product reduce carbon emissions, especially when the poorest benefit most. Reducing fuel taxes just doesn’t seem right.

  • 36 The Austrian March 28, 2022, 11:06 am

    Sunak deserves criticism, and surprised you didn’t mention the cut of basic rate income tax on one hand but NIC rates still increasing soon – pure sleight of hand. The whole tax system needs a rethink, and government spending altered. If we are going to re-work our transport and energy systems, it will cost enormous sums – look at HS2 which is small by comparison. New nuclear power stations, wind and solar farms, nationwide electric supply upgrades, smart motorways, rail and bus infrastructure…. And to do that the State will just have to spend less on other things – each year right now it’s 15% on State pensions (c. £150,000,000,000), 11% on welfare (c. £110 bn), etc. The State spends about £5bn pa on culture/media/sport.

    The National Grid did a study with hundreds of industry experts and estimates the green energy transition to cost in today’s money at least £2,500 bn – i.e. £2,500,000,000,000, and presumably half of that at least must be borne by the State. https://www.nationalgrideso.com/news/analysing-costs-our-future-energy-scenarios

    There’s no major new tax streams to find, as we’re already at the highest % tax take since WW2, so some big decisions and changes in what we expect from government are imminent, and it will get very ugly if Tory Chancellors cannot even find the spine to (for instance) simplify the tax system or reduce State employees’ pensions. The alternative is, at some point, a radical Labour government who will not want to reduce existing social spending meaningfully, and so to make the green economy work they will need to make unprecedented raids on corporations, property ownership, personal pensions and ISAs, to find £1,000 bn or so over the next 30 years.

  • 37 ermine March 28, 2022, 12:01 pm

    @xxd09 #33 All empires fall. They run out of energy, both physical and human in terms of ideas. The western/US empire has no particular exceptionalism. It is Schumpeterian creative destruction in a different arena. The cycles are long, but still there. Sic transit gloria mundi…

  • 38 Jonathan B March 28, 2022, 12:35 pm

    Thanks @Austrian, it is interesting to look at the summary of that National Grid study, though it would take a long time to properly work through all their linked documents.

    However if I understand right, that £2.5-3.0 trillion cost over the next 30 years is much the same for investing now in decarbonisation as for their comparison of “steady progress” which ignores the 2050 target; in that scenario change only happens as technology changes markets (e.g. people buying electrical vehicles only when they choose to replace a vehicle anyway and deciding on type depending on the economics of different fuels; similar at the household level for heating and at the national level for updating of electricity generation capacity).

    The important implication is that most of this won’t be done at state level funded by taxation, much is a different choice about investment that would happen anyway. There would be some state contribution if the plan chosen requires investment earlier than would have happened otherwise, but that wouldn’t be the whole cost.

  • 39 SemiPassive March 28, 2022, 3:27 pm

    Regarding who will pay for it all, I’m always curious as to how much profit National Grid can be allowed to make before they get forced to invest more in building out for green energy infrastructure that isn’t yet accounted for.
    I made an exception to my “do not invest in single stocks” policy for NG as I fancied the stable juicy dividends, but then sold out after making a nice 15% gain over just a few months on top of the dividend, and put the proceeds back into a more diversified dividend ETF. I probably hold enough NG across various UK trusts and ETFs anyway.

    I guess in the worst case Labour could nationalise National Grid on top of windfall taxes on oil and gas companies, which would give the FTSE a severe kicking.
    I think smaller entities such as wind and solar farm backed investment trusts will be less likely to be nationalised or have windfall taxes (being green), so I’m more geared to those and have spread across a few.

    Adding to The Austrian’s list, increased defence spending will be another state burden. You can see it reflected in BAE Systems share price.
    We have maybe one or two airbases to defend Britain from Russian probing vs many dozens during the Cold War, and the smallest armed forces in modern British history. Less than half the numbers of personnel vs the 1980s. Probably going to have to increase to 3% of GDP just to catch up.
    And weirdly even Labour agree. Well, some of them.

  • 40 anon101 March 28, 2022, 6:49 pm

    @the austrian

    I don’t want to detract too much from this blog post and your comments, which I mostly agree with.

    The point I would challenge is the government pensions as if they are immense. Yeah, the old final salary pensions etc should become a footnote in pensions/finance textbooks and resigned to history, but the reality is the maximum anyone can earn from core government type work is not that high compared to private sector for similarly skilled roles, so even pensions which are like (1/60th) of each annual salary each year carried forward are (1/60th) of a much smaller salary for equivalent skilled work in the private sector.

    I worked in a public sector role for a few years and despite the good career average pension scheme (NOT a final salary scheme), I left the role to go to the private sector (FTSE company) and have a lot less responsibility, doing identical but much easier work, and am paid a lot more – yeah I now am in a ‘worse’ pension scheme, but it doesn’t bother me in the slightest, especially when FIRE planning is easier when you can assume personal pensions are available prior to the 67/68 age that government type pensions require.

    I agree that pension disparities need looked at, but at the same time middle to top private sector salaries are not justifiable – this is why the public sector struggles to get top technical staff.

    A lot of the tax and spend at government level needs reworked, even the existence of NI & Tax at the same time is a mess, the binning of people into a few crude tax bands is a relic from the past and could be fixed. No one is going to touch any of this with a barge pole – even a cost neutral tax redistribution would bring enough ‘losers’ that it would be career ending as everyone who currently has any income or assets would see loses in some areas. Sadly, the only people who would likely benefit are the genuine sick, disabled and poor, as well as the genuine long term unemployed. As much as it is becoming trendy to call foul and shout about work-shyness etc, people in these groups are not living a life of luxury regardless of the rare extreme case a newspaper has managed to dug up and present to the world.

  • 41 trufflehunt March 28, 2022, 7:41 pm

    @The Austrian
    I tend to view with some scepticism a report such as this, commissioned by a corporation.  The plain fact is that corporations do not sink their own or shareholders, money into scenarios where the prospect of profit is muddy.  Therefore, admittedly without reading the report, I’d tend to consider National Grid to have commissioned views and figures that multiply the costs by huge factors, in order to to emphasise, and maximise, the sums that the state must inject. And minimise their own, and other corporations’, contributions.

  • 42 Dragon March 28, 2022, 11:25 pm

    Interesting selection of comments. If I may, I think that worthy though many are, what we really need to clarify first is the answer to the following question:

    What sort of world do we want to live in?

    And then work backwards from there in terms of how to achieve it in the here and now.

    Apart from a few die-hard romantics, I think if you were to lay it out to people, the answer would be:

    “21st century, forward looking, high technology society, with all the benefits of modern medicine”.

    (As an aside, look at the amount of supercomputer / cluster time devoted towards the COVID vaccines – the energy usage there must have been eye-popping, but I don’t think anyone was objecting to that?)

    I don’t think anyone really is going to say

    “18th century, feudal society with small elite where millions die from preventable childhood diseases please”.

    Unfortunately, unless we get real about energy, option 2 is more likely to be what we’ll end up with.

    The sad reality is that wind power (and most other renewables) alone is never, ever going to deliver the energy needs of the kind of society we all want. Well, not barring some harrowing breakthrough in battery capacity, or flooding large parts of the country for pumped storage. The first is betting on a wish, the latter, well… (See the recent COP26 jamboree in Glasvegas – diesel generators charging up the electric cars, and nuclear supplying up to 70% of the energy used by the conference, something the organisers weren’t exactly screaming from the rooftops)

    As the old saying goes, “Perfect is the enemy of good enough”.

    Nuclear fission really is the only option here in the short term. No, it’s not perfect, but it can tide us over until something better, e.g. fusion comes along.

    Fear of nuclear really comes from ignorance, and, unlike Japan, we don’t build our nuclear power stations near known fault lines / tsunami areas, and unlike the Chernobyl, the primary use of our nuclear power stations was not production of weapons grade uranium / plutonium.

    As others have alluded to, whilst driving electric vehicles allows some to feel a warm glow of virtue, all you’ve actually done is reduced local air pollution. The overall carbon cost of electric vehicles is, I suspect, not that different from traditional ICE engines when you factor everything in. Whether you want to abolish private transport altogether is another question entirely, but it’s a brave government who will try and push that through.

    The other issue here is one of optics. It’s all very well for the well off to virtue signal and lecture the proles, but actually, most people are totally on board with the “pollute less, be more efficient” message.

    However, it doesn’t look good when, oh, say

    1. The head of extinction rebellion drives a diesel car, by her own admission to get the poppets to school and rugger. I haven’t yet found out what kind of diesel, but won’t be remotely surprised if it’s something range rovery…

    2. The head of insulate rebellion admits their own (large, expensive, in a nice area) house is not insulated or double glazed…

    3. ‘Slebs like Emma Thomson have a “there and back again” jaunt over the pond in a day to lecture at a ER march in London. What was the carbon footprint of that? (As an aside, was she not the one who floated off to her Italian mansion (cf: Polly Toynbee) in a very public way when all the nasty plebs voted for Brexit, but came scuttling back on the quiet to her mansion in Scotland to make sure she got her “free” NHS care when COVID hit?)

    4. A worryingly large proportion of wind farms seem to end up on the (extensive) landholdings of the already rather well to do (see David Cameron’s dad, amongst others). We then see subsidies for wind power, including paying them not to generate when it’s too windy?! That to me sounds like the definition of insanity. In Scotland, that subsidy has already passed the £1 billion mark. I’m sure that money could have been put to better use, but hey ho.

    The point of all this is the galloping hypocrisy here turns Joe and Jane Average right off. People at the moment are generally on board with “green”, but just wait until the rolling black/brownouts start, or they see the “rich” start to pull ever further away, and they’re told “you can’t have a holiday in the sun, can’t drive your car on Mondays and Tuesday, can’t have the lights on in winter on alternate days, etc etc).

    Ditto all the “have no kids” cohort. Obviously whether to have kids or not is a personal choice, and some parents are clearly better than others, but at a basic level, if the population starts to drop off, where do people think the tax money is going to come from to pay for the ‘sainted’ NHS or other public services? For that matter, who do people think will be wiping their backsides for them in the care homes when old age has left them gaga? (hint, it will be those other, “selfish” people’s kids, not the robots (we’re some way off the sci-fi dream there)). I’m wandering off topic a bit there, so I’ll say no more on that here.

    Then it will get ugly before it gets better, and if things get really bad, well, I wouldn’t put it past a government in the UK (or any other “western” country for that matter) to say something like “desperate times call for desperate measures”, and grab cash to keep the lights on by e.g.”bailing in” your private pension and issuing you with an IOU or government bonds (at low/no return coupon) in return. See Argentina’s recent history, or the recent Euro crisis if you think that’s a small risk.

    Sorry, it’s late, and I’m rambling, but I guess what I’m trying to say is that there needs to be a coherent, strategic view on where we want to be as a society, and then plan our energy generation accordingly, including keeping it under local/national control.

    Slinging bungs to the already well off to buy Teslas and heat pumps, whilst building more wind turbines just isn’t cutting it and simply risks fracturing society and ultimately, civil unrest. Which is in no-one’s interest.

    Saw a great quote the other day:

    “My problem is, I’m still young enough to be idealistic, but old enough to be cynical”.

  • 43 random coder March 29, 2022, 2:51 am

    Agree about nuclear energy. It always goes back to same issues; a minority think nuclear is not clean enough and do correctly point out we don’t have a good plan for dealing with resulting waste. Healthy challenge and debate is a good thing, I don’t think we should be too critical about this challenge and I don’t view such folk as the main blockers to nuclear. Neither are the more agressive ‘nuclear is not safe’ crowd who are rarer again.

    Nuclear appears reasonably well accepted until a plant is proposed to be built in a given area, it is the not in my back yard crew, and cost, that are the main blockers. Sadly, project management is one of the most overpaid and under contributing careers ever thought up – delivering a project years, sometimes decades late, with much descoping, running massively over budget, and then writing a project closure report to say the project was a success and delivered against the plans (revised plans, probably monthly revisions long after the initial delivery date) is not a good look. The project management industry has a lot to answer to… rant over… My point is that the nuclear projects are some of the worst offenders. Like meddling with pensions, governments rightly will be looking at nuclear projects and thinking if this is a decade late and running millions over budget, it will not be perceived well.

    Most readers of this blog won’t like it, but if you are able to FIRE in your 30’s you are probably massively undersupporting the tax system in terms of how much you could be. The idea that someone can pile huge amounts of money into a pension at 41% tax relief and withdraw at a lower marginal rate, after a 25% tax free withdrawal might be legal, but it is an example of failures of government. Similarly, top earners dropping down NI rates is another example. I know why the 41% rate applies, and use a work salary sacrifice scheme to keep my salary under the 41% band, so this is not jealously speaking here – I am doing optimal tax and NI reduction via salary sacrifice. There is absolutely no chance I will be withdrawing at a 41% tax band when drawing down.

    You are absolutely correct that a complete systematic revision of the whole approach would need to happen to set the UK tax system on a sustainable and sensible path. We might not like it, but most people in the FIRE planning camp will be the losers, including me. Guess what though? – we are the ones fortunate enough to have options and the resources to help fund the essentials.

    If the government did a root and branch overhaul of tax properly, it would be me and most of the readers of this blog who would lose the most as that is how wealth redistribution works. The difficult part is the key bit of limiting the reach of the state – most reasonable people agree the NHS should be funded as well as policing. Similarly, that education is important. The difficulty is drawing lines where the state should stop – should taxpayers be paying for tens of thousands of english literature degrees every year for example? – I don’t want to start a tit-for-tat debate about which degrees are most valuable etc but my point is the state is already arguably, too generous in some areas, and too big in others. This degree example is a good one as few would argue about the need for engineers but you need to be in a room amongst some very highly paid people born into wealth before you start hearing suggestions that degrees such as history or art are ‘essential’. Again, I don’t want to upset people, my point remains – a lot of these luxury type backgrounds are far from essential government spending. The issue of how to support arts and such is a valid question that does need addressed somewhere, but having faculties in mumerous universities churning out hundreds of graduates for these courses each year is, arguably, not good use of taxpayers money in times where we are running up billions of debt.

    Part of the process is indeed asking the question what does the state need to deliver and fund, and what is nice to have. Some of the answers will not be liked by those wealthy enough to benefit from the nice to haves. Those wealthy enough will likely be paying more so more people can have just the minimum.

  • 44 Jonathan B March 29, 2022, 9:34 am

    Wow, some extensive ponderings above.

    @Dragon does come over as more cynical than idealistic, mostly because s/he spends part of the piece aiming pot shots at individuals who as far as I know are not readers of this blog. In the short term the biggest climate win is presumably to decarbonise electricity, and make enough of it that it can replace gas for heating purposes. Wind power is the only mature technology that can be introduced with any speed so needs to be despite needing back-up for low-wind periods. I am not sure about the idea of paying people for turbines not functioning, I assume that is a legacy of the incentive subsidies that were essential to install the first wind farms before the technologies were mature and economically viable.

    It isn’t clear to me why so little has done to develop tidal power which could deliver much more predictably than wind. What is talked about are huge schemes involving damming entire estuaries – why is there so little investigation of turbines situated in places with a high tidal stream? But ultimately it probably needs nuclear, which has proved itself repeatedly unable to deliver on time or on budget. I don’t know why that is. The proposed small generators that can be “mass produced” sound like an attractive proposition, but given they are promoted by a manufacturer you have to suspect that again the timescale and economies are being talked up.

    I agree with @random coder that government taxation and spending needs a thorough overhaul. As pointed out, those reading this blog have a better idea than most how to exploit tax allowances in saving, but that isn’t a reason not to aspire to a fairer system. That doesn’t mean incentives to save into pension funds wouldn’t still exist, only that the amount of benefit available would be properly thought out.

  • 45 trufflehunt March 29, 2022, 9:42 am

    @Dragon

    Re: “…. “My problem is, I’m still young enough to be idealistic, but old enough to be cynical”…”

    From the overall flavour of your comment, I suggest that idealism passed you by long ago. Reads like one long sneer at those who have money*, or those who do have ideals.

    You mention Scotland. In 2020, Scotland generated the equivalent of 97.4% of its electricity demand from renewables. A target of 100% was set in 2011, when renewable technologies generated just 37% of national demand.
    Looks like the subsidies, and the determination to pursue ambitious climate change targets, has worked.

    https://www.bbc.co.uk/news/uk-scotland-56530424

    * You may wish to have a few listens to a Dave Mackay. His politics are disagreeable to me, but he does have some choice words to say about the…. “Wah, wah… the little guy cain’t get on these days.. ” attitude.

  • 46 The Investor March 29, 2022, 9:51 am

    @all — Hi everyone, this has been an amazing discussion, thanks to all contributors.

    While I don’t think we’ve gone too far off the rails yet, can any further comments please try to focus on what is being said rather than the person who is saying it. That’s the most effective way to surface interesting points and counter-points that can move the discussion along, without it degenerating into a a heated and personal back and forth.

    Cheers again! 🙂

  • 47 The Austrian March 29, 2022, 10:02 am

    @Dragon, very much agree with everything you put. Govt by focus group and next week’s polling has to go, as some of the decisions to make any attempt at a green transition are going to be very unpopular, including extensive building on green belt of solar / wind / nuclear power, way fewer flights and cars, closing out-of-the-way schools / GPs / hospitals etc. Only 6% of UK energy usage is renewable, AT TODAY’S USAGE LEVEL. So in another decade, with population growth that needs to be, what, x 10? Those with significant property, pensions and ISAs are first in the firing line to pay.

    @trufflehunt, fine but you should skim it at least before making your mind up, it’s incredibly detailed and non-alarmist. Do you have another estimate of the costs of our move to significant renewable energy over the next 20 odd years – re-cabling towns and cities, new power generation, upgrading homes, etc? Even if they are overdoing it by 50%, there’s around £1,250bn of cost, and half or so must come from government. A third of the population have under £600 in savings! That’s 6 or 7 times HS2, and if the projections are nearly accurate, 12 or 14 times.

  • 48 xxd09 March 29, 2022, 10:21 am

    A couple of points
    There are a few underwater turbines being trialled in the Pentland Firth-went in a year or two ago-no word of how it’s going-enormous forces in play plus the occasional boulder!
    Interestingly here in the frozen North of Scotland we had 2 spells a couple of years ago of a week each at -10 degrees and no wind!
    Luckily we had English electricity available
    I am interested how a country can afford to run two parallel electricity generating systems-is it possible?
    xxd09

  • 49 weenie March 29, 2022, 11:41 am

    @ermine (15) – just clicked through on that Institute of Physics report you linked, very interesting, thanks.

    I have to admit that me ‘doing my bit’ can only mostly be considered moderate to low impact actions but they’re ones I can do long term and consistently.

    Just had delivery of my garden compost bin so that’s another tick off the low impact list!

  • 50 The Investor March 29, 2022, 1:38 pm

    @weenie — It’s a small thing but I find making my own compost one of the most life-affirming things you can do for so little effort, compared to throwing out peelings in the rubbish etc. It’s totally magical and grounding.

    (You wait until you see how much it can devour, it’s shocking if you’ve never done it before. I’ve been running my current bin since I moved in four years ago, it gets all my peels etc plus (small) garden cuttings etc, and so far I think I’ve taken one trowel of compost out as a test! 🙂 )

  • 51 Eadweard March 29, 2022, 9:22 pm

    Decarbonising the economy will not be nearly as expensive as many here suggest.

    DNV, a multinational consultancy in energy and shipping (my employer) produces an Energy Transition Outlook each year:
    https://eto.dnv.com/2021/highlights/energy-transition-outlook
    DNV has large operations in both Renewables and Oil & Gas, so in my view has a balanced outlook. The ETO analysis says that annual global expenditure on energy as a fraction of GDP will only need to increase by 4% while the economy decarbonises. NOT decarbonising will cost vastly more – the economic damage from severe climate change would be horrendous.

    The affordability of decarbonising is largely due to wind and solar now being the cheapest source of energy, and getting rapidly cheaper. IEA (no tree huggers for sure) say the same.
    https://www.carbonbrief.org/solar-is-now-cheapest-electricity-in-history-confirms-iea
    Increasing energy efficiency is also a major factor in the affordability of decarbonising.

    For sure we need energy storage to go 100% renewable, but that is coming fast. At work I am seeing lots of interest in hydrogen & ammonia for energy storage, and for transport fuel (ships especially).

    I don’t see much future for nuclear. Not for green reasons, but simply because it is far more expensive than renewables, and just keeps getting more expensive.

    I design wind turbines and we are getting lots of work from Oil and Gas companies now, who want to get into offshore wind, floating wind, and renewable fuels such as hydrogen & ammonia. The change is coming. Too slowly now, but I am optimistic it will speed up as political momentum builds.

  • 52 ermine March 30, 2022, 12:33 am

    > hint, it will be those other, “selfish” people’s kids

    Been anywhere near a care home recently?

    hint: immigration. You seen care wages? Bet you don’t bring your kids up to aspire to that sort of low-end grunt work.

  • 53 xxd09 March 30, 2022, 9:40 am

    Personally on re “Care” as I get old
    Making strenuous efforts to get on with my wife-women live longer -and my kids-had 3 -luckily 2 were girls so more caring
    After that off to Dignitas-expression of wishes and monies in place
    At least that’s the Plan!
    Who knows except like the stockmarket a crash is coming but this one will be of non recoverable type!
    xxd09

  • 54 Matt April 2, 2022, 9:26 pm

    Not entirely sure what to make of this piece. I have a lot of sympathy with those that feel it’s clearly been written by a Londoner with little experience of the rest of the UK. On the other hand I absolutely support the push for renewables and nuclear under this government, partly for environmental reasons, but also for national security reasons, similar to the reasons I supported Brexit. Energy independence and sovereignity go hand in hand in my view. So whilst I think Sunak’s fuel duty cut was imperfect, I can see why he did it – it’s a very easy lever to pull to get more money into the economy, particularly amongst key voter groups. That’s families and pensioners outside of London where public transport makes zero sense. With an aging population with increasing mobility issues, cars are going to be with us for a long time yet!

  • 55 The Investor April 3, 2022, 8:58 am

    Not entirely sure what to make of this piece. I have a lot of sympathy with those that feel it’s clearly been written by a Londoner with little experience of the rest of the UK.

    @Matt @others — As I’ve mentioned before, I grew up hundreds of miles from London and most of my family still live far from here. These are all 1-2 car households. (That’s not counting motorbikes!) Just as with our Brexit discussions I’m not half so out of touch as some people like to think / pretend.

    I’ll say it simply again, as I did in the article. Huge numbers of people DON’T drive, including outside of London. And poor people drive less.

    A fact:

    Lower income households in the UK drive 40% fewer miles than the highest income bracket.

    Those accusing me of ‘not getting it’ or being somehow elitist should, ironically, look at themselves first. 🙂

    There are far better and more targeted ways via the tax or benefits system to assist poorer households facing the cost of living crisis. And there are far fairer ways to universally help all households, too.

    The fuel duty cut is a misguided political bung. That’s that.

  • 56 petejh April 3, 2022, 12:07 pm

    Pointing out that: ‘huge numbers of people don’t drive’ fails to acknowledge the bigger point: ‘100% of people do rely on driving’.

    For virtually everything they consume.

    The consumables, raw materials and the services we all use don’t make their own way to a place of purchase or point of use.

    In that respect a fuel duty cut appears to me to be one of the more equitable tax cuts as, theoretically, if cost-savings are passed on then it would impact cost of living for 100% of the population, not just drivers.

  • 57 MG April 4, 2022, 10:32 am

    One point on the renewables issue. Given that a wind farm can be built in around a year why aren’t these being put everywhere off the coast of the country? Couple that with hydrogen production plants onshore to produce green hydrogen which can replace natural gas and this country could be self-sufficient in green energy in no time. There’s other excellent ideas being thought up for producing and storing green energy such as: https://alpha-311.com/ and https://www.rheenergise.com/how-it-works (NB I’m not an investor in these yet, trying to stick to the passive route, but am tempted by their offerings)

  • 58 The Investor April 4, 2022, 10:40 am

    @MG — On a related note, there’s an interesting company raising money on Seedrs at the moment that is developing technology for self-righting floating offshore wind platforms:

    https://www.seedrs.com/gazelle-wind-power

    It touts various advantages versus the traditional model (which tends to follow the route of offshore oil industry’s technology).

    Needless to say not a personal recommendation, very risky, etc. But I’m minded to think that some kind of breakthrough like this would be very helpful to achieve scale. (These floating platforms can be positioned much further offshore, for instance.)

  • 59 MG April 4, 2022, 5:19 pm

    thanks for the “not a tip” tip @TI 😉

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