As we look to the Chancellor’s Budget announcement on 26 November, as well as any outcomes from COP30 (the international climate talks taking place in Brazil until 21 November), we face questions about the kind of world we want to live in, and how to pay for it.
Both the negotiations at COP30 and the Budget preparations in the UK are set against a backdrop of huge inequalities, with the rich getting richer, be they billionaires or fossil fuel companies, whilst the poor continue to suffer.
As Christians, we believe that God created a good world where every person has inherent worth and dignity. We are called to love our neighbours, both locally and globally. We can do this by making sure that we are paying a fair amount of tax, based on how much wealth we have, and we can also do this by caring for God’s creation so that vulnerable communities across the world are not hit even harder by the climate crisis.
Fairer taxes and the climate crisis go hand in hand in many ways: it’s worth thinking about the ways the Budget itself impacts climate justice.
Look out for announcements on housing retrofit and heat pump schemes which could be scrapped, investment in renewable energy, changes to road pricing, and measures aimed at bringing down energy bills. But an underappreciated area where Budget choices can create a greener future is tax.
Polluter pays
The polluter pays principle is simple – those responsible for polluting the earth should pay for damages caused. On a global scale, this looks like historically higher polluting countries contributing to loss and damage funds for countries most affected by extreme weather – something that will be negotiated at COP30.
‘Polluter pays’ can also be implemented within the UK by taxing the enormous profits of energy companies. These giants have made over £125bn profit on their UK operations since the energy crisis started – these are record profits while energy bills have rocketed, driving the cost of living crisis as well as the climate crisis.
Energy companies’ profits equate to £878 per household, per year. At the same time, average annual energy bills have soared from £1,042 in 2020 to £1,755 today, after peaking even higher in early 2023.
Unbelievably, the industry is lobbying to axe the existing Energy Profits Levy at the Budget which would lose £6bn for the Treasury. Instead, the Government should hold firm and tax these excessive profits to bring bills down and reinvest in climate solutions.
‘Sin’ taxes
At the individual level, governments can look at so-called ‘sin’ taxes on high-carbon activities. These have the dual effect of raising revenue and discouraging the ‘sinful’ behaviour, so whether they raise large sums or significantly drive down carbon emissions the effect is positive.
This could include taxes on private jets, frequent flyer levies, super-yachts and space tourism. Such taxes would only hit the very wealthiest, as opposed to basic carbon pricing which can be regressive to poorer motorists.
Wealth taxes
Finally, a basic wealth tax is a pro-climate tax. Through their activities and investments, an individual from the world’s richest 0.1% produces more carbon pollution in a day than the poorest 50% collectively emit all year.
At JustMoney Movement we are calling for a 2% tax on assets above £10 million, which, as we argued in our previous blog, is a key step for tackling inequality in the UK. It would also help to constrain the excessive carbon consumption of the super-rich, and the billions it would raise could help to build our fairer, greener future.
The choices Rachel Reeves faces at the Budget aren’t just about making sums add up, but they form the shape of our shared country. Taxing wealth isn’t about punishing the wealthy or raising tax for tax’s sake; it’s a step to building a more equal Britain with a cleaner, greener future. It’s a step towards loving our neighbours and creating a society where all people are able to live with dignity and flourish.
Email your MP using our easy tool to make the case for taxing wealth in the upcoming Budget:
It’s frustrating how some budget decisions, like scrapping housing retrofits, are set to worsen the climate crisis. These policies should prioritize the vulnerable, and that starts with fairer taxes to fund sustainable solutions.