Government propose more green taxes

The UK government is considering raising green taxes in order to meet the serious concerns raised by global climate change. MPs are calling for a new tax on long haul flights. Also claiming that a possible rise in regular fuel duty will have to go ahead, if emissions from road vehicles are to be curbed.

The EAC or Environmental Audit Committee has issued a new report, saying that there appears to be little sign that the Treasury has headed serious warnings regarding climate change.

The EAC states that it is important that the Treasury stop what it calls “ghettoising” the importance of environmental problems. And take urgent action with regard to the taxation of pollution and the raising of funds to be invested in clean technology.

Tim Yeo MP, who chairs the committee, said that a Stern Review had helped stimulate debate on the economic factors that are caused by climate change. However, he also said that the Treasury was failing to respond, with due urgency to the situation.

He said “On green taxation, the Treasury has continually demonstrated a lack of ambition and imagination. Green taxes, as a proportion of all taxes, peaked in 1999 at 9.7 per cent and have declined ever since, falling to 7.3 per cent in 2006”

“The Treasury must be bolder in raising green taxes once again. It should sell these tax rises to the public by linking them to increased spending on the environment and reductions in other taxes,”

“The Treasury has increased funding for carbon-reduction technology, including backing a pilot Carbon Capture and Storage power plant. But this still falls painfully short of the scale of investment that is required to decarbonise the economy. The Treasury must introduce a financial mechanism to ensure that Carbon Capture and Storage technology is fitted to all new fossil fuel power stations in the UK.”

The EAC also states that Government departments lacked clear targeting on the reduction of emissions. In addition, the government needed to do more in bringing environmental issues into mainstream political debate.

MPs have welcomed the decision by the government to alter the way Air Passenger Duty (APD) will now be implemented, moving it from a tax on individual passengers to a per flight levy. They did however indicate that a doubling of APD rates from this time next year only equals taxes in place when Labour took power.

There will also be changes to long-haul and short-haul flight tax brackets, the MPs have called for a separate tax bracket for what it refers to as “very-long haul”.

They claim that the charges for short-haul flights should be reflected in the disproportionate levels of emissions they create, in an effort to push passengers to switch to rail travel.