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According to a recent report in the Guardian the UK has much higher subsidies on fossil fuels than other European countries (presumably, it is the Guardian, this is a very bad thing). They report:

The UK leads the European Union in giving subsidies to fossil fuels, according to a report from the European commission. It found €12bn (£10.5bn) a year in support for fossil fuels in the UK, significantly more than the €8.3bn spent on renewable energy

But is it accurate? according to Tim Worstall, the numbers are not credible for at least two reasons: they confate "subsidy" with lower tax and they conflate lower VAT on all household energy with a boondoggle for fossil fuels.

Who is right. Is the UK offering unusually large subsidies to fossil fuels?

matt_black
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    In what sense is a lower tax rate not a subsidy? If a government passes the Make Taxes Lower For Fred Flinstone bill, lowering Fred's tax rate by 10%, that's just as much a benefit to Fred as if they'd paid him $whatever-it-is directly. Put another way, if VAT on solar panels was lowered to 5%, would Tim Worstall decry it as a government subsidy for renewable energy or not? – James Picone Jan 24 '19 at 03:54
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    I feel like it's worth pointing out that the Guardian article you linked a) specifically mentions that the largest component is the VAT difference and b) specifically notes that that counts as a 'subsidy' under the WTO definition, but that the UK disagrees, citing the IEA definition. These seem like important details to include in the question. They certainly indicate Worstall is being deceptive (like that was ever in question) – James Picone Jan 24 '19 at 04:14
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    @JamesPicone They are important details that fit better in an *answer*. – matt_black Jan 24 '19 at 13:47
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    @JamesPicone The sense in which a lower tax rate is not a "subsidy" is the plain definition and wide understanding of what a subsidy is. In this case the subsidy isn't even to the energy industry: it is to consumers. Moreover, the "subsidy" goes to consumption of energy from any source not just fossil fuels so is doubly misleading. – matt_black Jan 24 '19 at 13:50
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    @JamesPicone Compare with the cost of petrol/diesel in the UK: the consumer pays *far* more than the cost of production (most of the price is tax). To me a subsidy would imply the consumer paid less than the production cost. But,according to some of the arguments in the Guardian, campaigners could assert that the *right* level of tax should be say £2/litre (vs total current price of ~£1/L) making the "subsidy" vast and in tens of billions. This seems a very arbitrary way to define a subsidy entirely open to nonsense from campaigners. – matt_black Jan 24 '19 at 13:55
  • vote to close as primarily opinion based, since your opinion of what a subsidy is changes any possible answer. – daniel Jan 24 '19 at 19:19
  • It’s a matter of definition. In the U.K., VAT on electricity and gas is 5% instead of 20%. You can call this 5% tax or 15 percent subsidy. Fuel tax has not been increased for some time. You can call the existing tax a tax, or you can call the non-increase a subsidy. Entirely up to you. – gnasher729 Jan 23 '19 at 19:33
  • As it stands this question asks two different things: in its title, it's about verifying whether the UK gives more subsidies or not. In its body, the question is not really about the numbers, but about what should be considered a subsidy or not. The latter part is a question of definitions and not factual. Please fix the question by leaving out all references to Worstall who is _not_ debating the numbers but the definition. – Sklivvz Jan 25 '19 at 08:14
  • @Sklivvz This poses an interesting question for skeptical analysis. The *claim* is based on a subjective and arbitrary definition of *subsidy*. IF such claims can be made without challenge because skeptics can't deal with the fact the claim itself involves a subjective and arbitrary definition then we will create a huge hole in our ability to analyse extreme claims. I think good answers here are possible but must deal with clarifying what those definitions are. We might have to conclude that the answer depends on the definition but that is better than no challenge at all. – matt_black Jan 25 '19 at 21:12
  • @matt_black The question has multiple issues as I've commented above. Is the claim you want addressed: (a) Is it true that "the UK leads the European Union in giving subsidies to fossil fuels" for 12.5bn EUR? or (b) Is it correct to include lower taxes in the calculation of "subsidies" in this context? – Sklivvz Jan 26 '19 at 00:47
  • @Sklivvz The problem with the claim is you have to have an agreed definition of "subsidy" for the claim to be true. If that is arbitrary and not in line with the normal understanding of the word then the claim is doubtful. If the claim is also exaggerated because it counts a subsidy for fossil fuel when it is actually for something else then it is even more doubtful. Those were the problems with the claim I pointed out. Verifying a claim based on a false definition is not skeptical analysis. – matt_black Jan 26 '19 at 01:23
  • @matt_black so is the question (c) Is there an agreed definition of subsidy so it can be compared across Europe? I don't think this claim is being made though in either source. – Sklivvz Jan 26 '19 at 08:53

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