Fossil Fuel Subsides

I recognise that climate change is one of the most serious challenges facing us today. The UK is already the third best country in the world at tackling climate change, but the Government is working hard to further reduce emissions and increase generation from renewables, while at the same time ensuring a reliable, secure source of energy and protecting consumers from excessive costs.

As you are aware, the Government supports the G20’s initiative to reform inefficient fossil fuel subsidies and I welcome this commitment. It is important to distinguish, however, that the Government does not provide subsidies to fossil fuel production or consumption. The sums argued by some are features of the tax regime intended to promote the industries concerned. For instance, the UK oil and gas sector which has made a huge contribution to the economy and supports thousands of jobs.

Ultimately, Britain is already leading the way on tackling climate change and building an energy system fit for the 21st century. We will be one of the first developed countries to take coal out of the energy mix completely, with the announcement that all coal-fired power stations where carbon emissions are not being captured and stored will be closed by 2025. Renewable capacity has quadrupled since 2010, and the Government has sent clear signals to investors and businesses about the shift to a low-carbon economy through its Clean Growth Strategy.