Ministers in talks over shelving carbon tax on fertiliser to curb food inflation
Summary
UK government ministers are discussing pausing a planned carbon tax on fertilisers to help reduce rising food prices. They are also considering suspending import tariffs on various foods and fertilisers to support farmers facing higher costs due to global fuel and fertiliser price increases linked to the conflict in Iran.Key Facts
- Ministers want to delay a carbon tax on fertilisers set for early next year.
- The carbon tax would charge importers based on the pollution created when making fertilisers.
- Fertiliser prices have increased sharply since the Iran conflict, which affects shipping routes.
- High fertiliser costs risk causing farmers to leave fields unplanted, which would raise food prices.
- The government aims to suspend tariffs on foods like bread, biscuits, and bananas to help with food inflation.
- There is disagreement between the Treasury and the Department for Business and Trade about changing the law to pause the tax.
- The UK produces around 40% of its own fertilisers, importing the rest.
- Farmers could face significant financial losses next year due to rising costs from the conflict in Iran.
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