Don't be yellow, Gordon. Be green

Gordon Brown has been urged to stand firm against calls to abandon green tax rises on fuel as environmentalists warned that scrapping the proposals would risk undermining Britain's drive towards a low carbon future and send the wrong message about the Government's commitment to tackling greenhouse gas emissions.

As lorry drivers staged protests over the spiralling cost of diesel, and a growing number of Labour MPs appealed to the Prime Minister to rethink his stance on gas-guzzling car taxes, concerns grew that ministers were considering cancelling the 2p rise in fuel duty planned for October – and were also willing to make concessions over plans to increase car tax for older, more polluting vehicles.

Both moves would be aimed at quelling anger among motorists and hauliers and to relieve voters' anxieties about spiralling household bills.

But green campaigners encouraged Mr Brown to press ahead with the fuel duty increase, warning him against allowing the economic downturn to derail the drive to cut carbon emissions. Dave Timms, economics campaigner at Friends of the Earth, said: "We want them to push ahead with the 2p rise in fuel duty and we are concerned they won't. It would send a message that the Government is going to be buffeted around and pushed around on the issue of climate change."

Amid fears that the gloomy financial outlook could sap the political will needed to combat climate change, Charlie Kronick, senior climate adviser at Greenpeace, said: "When they are willing to spend millions of pounds shoring up their vote in a by-election they can do this as well. How serious can they be about using the tax system to try to affect environmental outcomes when, if they are under political pressure, it is the first thing that goes?"

The Chancellor, Alistair Darling, has already postponed until October the 2p increase in fuel duty that had been planned for April. But he is facing intense political pressure to delay it further or scrap the measure altogether. Lindsay Hoyle, the Labour MP for Chorley, said: "We must abandon plans to increase fuel duty by 2p and the Government should then be looking to help consumers even more by reducing the duty on fuel if possible."

Stephen Crabb, the Conservative MP for Preseli Pembrokeshire, added: "The Government will try to hide behind climate change arguments for why the tax needs to be so high but this is spurious.

"High UK fuel taxes will not reduce the overall number of lorries on British roads but it will accelerate the disappearance of many excellent UK haulage firms and the increasing presence of Irish, German and Hungarian trucks who pay zero tax to Britain."

But Norman Baker, the Liberal Democrat transport spokes-man, said scrapping the fuel duty increase would "send the wrong message". He added: "The reality is that the reason we have a massive increase in petrol prices is due to the international market and the price of oil. The Government should be pressing the case for moving away from an oil-based economy."

Yesterday senior cabinet ministers hinted that the Government may back down over plans to increase car tax on older, polluting cars amid a revolt by 42 MPs – 35 of them Labour rebels – who warn the issue could be a repeat of the 10p tax fiasco that forced the Government to rewrite key parts of the Budget last month. Under the plans, cars registered after 2001 will be taxed based on their carbon emissions. Critics say that low-income families will be faced with retrospective car tax increases up to £200.

Jack Straw, the Justice Secretary, said Mr Brown and Mr Darling were "listening to public concerns" about the policy.

Greenpeace has backed the new tax bands, saying they would encourage people to stay away from the most polluting cars when buying secondhand. But other environmental campaigners backed calls for the car tax reform to be scrapped, warning that it "gives green taxes a bad name" by taxing consumers without encouraging them to drive less polluting cars.

Suspicions are already growing that environmental policy is slipping down the political agenda with the Conservatives also giving it less emphasis in recent months. George Osborne, the shadow Chancellor, urged Mr Brown to scrap planned increases in car tax, insisting that green taxes must be matched by cuts in tax elsewhere. He said: "At a time when families are feeling the rising cost of living, the Government would be foolish to proceed with a big increase in road tax on family cars.

"The Conservative Party has consistently opposed these measures. We believe that any increases in road tax should be focused on the most polluting vehicles and offset by reductions in family taxes so that they are genuine green taxes, not stealth taxes."

Caroline Lucas, the Green Party's principal speaker, warned that backing down over fuel duty would be "unforgivably short-termist". She said: "If the Government will not take action to reduce oil demand, it will set us up for a Seventies-style oil shock, and more. The only prudent thing to do is to stay the course on fuel duty, while rapidly investing in alternatives to reduce demand.

"Brown, if he really were green, would invest in renewable energy technology, transferring both the spending and the workforce from useless Trident into useful infrastructure and he would provide free insulation to every home."

*The French President, Nicolas Sarkozy, suggested yesterday that all European Union countries should cap their taxes on diesel and petrol. "VAT should no longer apply once the price goes above an agreed level," M. Sarkozy said.

Such a move would slow the rapid rise in the pump price of fuel, he said. He accepted, however, that it could only be agreed by all 27 EU governments. The idea was shot down by the European Commission, which said that it would discourage oil-producing countries from taking action to restrain prices.

Green taxes under threat

FUEL DUTY ESCALATOR Increases duty in line with inflation to cut emissions. A 2p rise for April was held until October and may be delayed again.

VEHICLE EXCISE DUTY New cars have faced emissions-based taxes since 1998. Proposals include a system of emission bands from 2009, including older cars registered after 2001 and showroom taxes for newly-purchased gas guzzlers from 2010.

WASTE COLLECTION TAX Pilots are running allowing local authorities to levy charges for household waste to encourage recycling but are unlikely to be implemented nationwide.

Click here to have your say

Interesting? Click here to explore further