The underlying Moral Issue: I have just ordered a new bike even though my old bike is not broken. I feel terrible about this, but since I have had the old bike for roughly 10 years and it has been stolen, beaten up, and then recovered and repaired, it is probably not an offensive self-indulgence. However the reason I bought a bike now is because the government is subsidising the cost of bikes bought for travel to work and NPL offer a scheme in which I (as a higher rate taxpayer) pay only around half the cost of the bike. And even that is taken in 12 interest free installments from my salary. So given that I would probably need a new bike in the next 5 years, it made sense to get it now for half price. So if you are a taxpayer, I would just like to say: Thanks 🙂
But how can that be fair?: The aim is to encourage people to cycle more and in particular to cycle to work, and I think there are probably are marginal cases where it does achieve its aim. But personally, I would have cycled to work anyway. So the government is paying me to do something I would have done anyway. IMHO the money would be better spent on cycle paths which would encourage me to use the bike for more journeys than I currently do. Similar issues occur whenever any activity is subsidised.
- Why – with the noble aim of encouraging production of renewable electricity – should people with £10,000 to spare be subsidised to buy solar PV panels which will reduce their electricity bills and give them a guaranteed return on their investment. We all know that the most effective way to reduce national energy wastage would be to invest in insulating homes.
- Why – with the noble aim of encouraging production of renewable electricity – should wind energy providers be subsidised not just for the useful electricity they produce, but for electricity they produce which no-one can use. Here the government spending might have been better targeted to increasing the capacity of the national grid to capture and store wind energy surges from remote parts of the country. Unfair stories here and here.
- Why – with the noble aim of encouraging agricultural production – do we pay billions of pounds to farmers, but let high tech businesses go bust for want of investment?
- to store energy in the flywheel (e.g. when freewheeling down hill or instead of braking);
- to leave the flywheel to store energy (the normal state)
- to extract energy from the flywheel (e.g. when starting or going uphill)