An extra tax on the UK’s biggest and richest polluters would raise billions a year to help with the country’s green transition, Oxfam Scotland has said.
The charity found that the government could have raised an additional £23bn last year with extra taxes on fossil fuel companies, frequent flyers and the extremely rich who use private jets.
The money could then be used to help households reduce their carbon emissions and to fund greener forms of public transport.
The report, Payment Overdue: Fair ways to make polluters across the UK pay for climate justice, shows that by targeting those who are most responsible for emissions, the government could quickly raise significant funds for climate action without burdening households that are already going through a cost-of-living crisis.
While households faced surging energy bills and high inflation last year, oil and energy companies raked in record profits and are continuing to do so this year. A windfall tax was implemented as a way to raise additional tax revenue and help to provide a cap on energy spending. But energy firms continued to enjoy record profits despite the tax, which caused opposition parties and environmental campaigners to call for further action.
The Oxfam report recommends that the government enacts a series of revenue-raising measures including a redesigned windfall tax, a redirection of existing fossil fuel subsidies, a frequent flyer levy and new taxes on the use of private jets and superyachts.
Lewis Ryder-Jones, advocacy adviser at Oxfam Scotland, called on Scottish first minister Humza Yousaf to urge the government to charge the richest polluters for the environmental damage they cause.
“With global temperatures soaring, now is the time for the Prime Minister to turn up the heat on fossil fuel companies and the high-emitting behaviours of the wealthiest people,” he said.
“It’s simply not right that around the world and here in Scotland people on low incomes face paying the price for a crisis they did least to cause.”
The charity said that increased funding flows could have made Scottish buses free for many more people on low incomes, such as people in receipt of social security payments and many unpaid carers. Extending concessionary bus travel could be a step towards eventually making public transport free for everyone in a bid to cut car usage and slash carbon emissions.
Transport is currently Scotland’s biggest emitter, generating more than a quarter (26 per cent) of the country’s carbon emissions.
Alternative measures that could be funded from additional revenues include boosting energy efficiency in low-income households, which would both cut emissions and household bills.
A government spokesperson said: “Our windfall tax on oil and gas companies is expected to raise an extra £26bn, whilst our tax system is also designed fairly so the richest bear the most burden – UK taxes on wealth are on par with other G7 countries and the top 5 per cent of income taxpayers contribute half of all income tax.
“The UK is a world leader on net zero, cutting emissions faster than any other G7 country, and with 48 per cent of our electricity coming from renewables in the first quarter of this year, the four largest operational wind farms in the world off our shores and significant investment in nuclear power, we expect that to continue.”
