Scotland’s Net Zero Secretary has indicated the Scottish Government will use its “limited” tax powers to help meet climate targets after a leading charity called for the highest polluters to face a higher burden.
The Scottish Government is being urged to challenge the Prime Minister to take stronger action on taxing climate polluters, with campaigners claiming doing so could open up extra cash north of the Border.
Oxfam said that as global temperatures soar, Rishi Sunak must “turn up the heat” on both fossil fuel companies and the super-rich with their “high-emitting behaviours”.
The charity said greater levies on oil and gas firms, coupled with a system that “fairly taxes extreme wealth”, could have raised between £10.5 billion and £12.6 billion in “much-needed new finance for climate justice” in 2022.
Oxfam has detailed the changes in a new report looking at how ministers could “make polluters across the UK pay for climate justice”.
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The document has suggested that Scotland could also benefit, stating that “if the UK Government were to spend £5 billion of these additional revenues on green public transport in England, this would mean an additional £371.39 million for Scotland”.
Lewis Ryder-Jones, a policy and advocacy adviser at Oxfam Scotland, said while Mr Sunak must act now, Mr Yousaf also has a role to play.
He added: “The First Minister must send the Prime Minister a clear message – there can be no more buck-passing.
“It’s time the biggest and richest polluters pay for the damage they’re causing.”
He said all the devolved administrations in the UK could benefit from further funding if the Westminster Government increases levies as Oxfam suggests.
“By taking action to make polluters pay, and then spending the revenue on climate action, the UK Government can provide all UK nations with a significant financial boost,” Mr Ryder-Jones said.
“In Scotland, that means more to invest in a transition to net-zero that is not only quick, but also fair.”
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Oxfam wants to see a permanent excess profits tax introduced for fossil fuel companies, as well diverting money that goes towards subsidising such companies through tax reliefs and other means to be spent in other ways.
In addition, it is calling for a frequent flyer levy and a tax on super yachts to be introduced, to ensure the wealthiest citizens pay more.
It stressed the “onus of paying” for action on climate change “should not be split equally among the public”.
The report said: “Those who have emitted the most and profited while doing so – particularly fossil fuel producers and wealthy people – should be doing the heavy lifting.”
Oxfam also said Holyrood could use its existing devolved powers to increase income tax for high earners.
Scottish ministers are also urged to consider imposing a higher rate of airport departure tax for private jets using Scottish airports, and to “transparently explore the use of devolved powers to implement a frequent flyer levy in Scotland”.
Other actions could involve “innovative measures” such as the introduction of workplace parking levies, or linking business rates to a firm’s carbon footprint or level of climate action, Oxfam added.
Mr Ryder-Jones said: “The prospect of significant new funds coming to Scotland should drive the First Minister to press the UK Government to act now; but he shouldn’t simply sit and wait.
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“Instead, Humza Yousaf must get on and use all the levers at his disposal to make polluters pay for their damage.
“The climate bill is large and growing – it’s time for those who have done the most climate damage and who have the greatest financial capacity to pay up.”
Mairi McAllan, the SNP Government’s Transport, Net Zero and Just Transition Secretary, has suggested tax powers could be used in Scotland to help tackle the climate crisis.
She said: “From wildfires to flooding, the twin crises of climate change and nature loss are affecting our lives right now and the need for climate leadership could not be more urgent.
“As Oxfam’s report recognises, the majority of taxes remain reserved to the UK Government. The Scottish Government is committed to using the limited powers we do have to help meet our climate targets.”
She added: “By embedding the ‘polluter pays’ principle in our policy making, and continuing to take a progressive approach to tax, we will ensure that we achieve our goals while protecting those on the lowest incomes.
“The Scottish Government is delivering policies on a number of fronts to make sustainable travel choices more attractive – including free bus travel for younger and older people, and a six-month pilot to trial the removal of Scotrail peak-time rail fares – as we know that to reduce car use, public transport has to be available, affordable and accessible.”
A UK Government spokesperson said: “Our windfall tax on oil and gas companies is expected to raise an extra £26 billion, 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% 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% 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.”
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