Letter to the director of the Institute of Fiscal Studies | Brussels Blog

Letter to the director of the Institute of Fiscal Studies

posted by on 14th Oct 2013

28th September 2013

Dear Dr Johnston,

Thank you for speaking to me on Tuesday. I thought your presentation of the state of the tax system and government expenditure at Economic competence and ‘In the Black Labour’ was very informative and clear.

You may remember I asked the question on the topic of earmarked taxes; in particular whether earmarked tax rebates should be counted as government expenditure or a cut in taxes? You agreed that they were a cut in taxes.

The particular tax rebate I mentioned was the rebate on VAT for every worker employed [1]. This rebate is an earmarked tax rebate. You were doubtful of earmarked taxes for reasons you explained but what objections do you have to earmarked tax rebates?

After the session I suggested to you that we need a very high carbon price to combat climate change. You replied that this would put our industry at a disadvantage. When I suggested imports should be taxed on their embodied carbon, you raised the objection that this would start a trade war.

If one takes the view that a high carbon price is necessary to combat climate change then the threat of a trade war should be taken into account. Do you know of any papers addressing this issue? You informed me that you were a member of the Committee on Climate Change, who on the committee would be suitable to pass an opinion on this matter?

Going down in the lift I raised the matter of campaigns to tell the public of how their everyday actions create carbon pollution. You agreed that the public can change their behaviour when presented with publicity campaigns, in particular: the campaigns get us to wear seat belts and to stop overfilling our kettles were successful. My reading of the minutes of the Committee on Climate Change suggests that this is not the view of the committee as a whole. Am I correct?

When we briefly spoke again at the event hosted by the Royal Statistical Society, I was trying to engage you in the question of the 15 year “pause” in global warming. Your perfectly reasonable response was the you were not the climate scientist on the Committee on Climate Change.

I have spoken and corresponded with most members of the committee and I am concerned about the make up of the committee. It is not just that, as I understand it, Sir Brian Hoskins is the only climate scientist on the committee, it is that I have had similar reactions to yours before: Paraphrased “I am a member of the Committee on Climate Change but, on matters of climate science, I defer to the climate scientist on the committee.”

Is my impression correct?

Yours sincerely

Geoff Beacon

[1] The employment effect of subsidies, Report to the Directorate General Employment, Industrial Relations and Social Affairs, Commission of the European Communities, November 1995.


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