Andrew Grice: The Week In Politics

Brown will put saving seats before saving the planet low to save seast
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The Independent Online

Green taxes are the flavour of the month. Our politicians are queueing up to propose a raft of new taxes to encourage businesses and people to change their behaviour in order to save the planet --and boost government coffers at the same time.

David Cameron, who deserves credit for forcing the environment up the political agenda, believes that green taxes can square the circle on tax by allowing the Tories to cut taxes on "families and jobs" and plugging the gap before he can serve up the wider tax cuts demanded by his party.

The Tories promise "replacement taxes, not extra taxes", an apparently clever line designed to allow them to attack Gordon Brown for imposing more "stealth taxes" if he plays the green card in his final Budget next spring.

The Liberal Democrats, for long the most pro-environment of the three main parties, have published a detailed tax package which includes an end to cheap flights and road tax of up to £2,000 for the most gas-guzzling cars. As a sweetener for their "green switch", they offer a 2p in the pound cut in income tax.

Labour politicians are joining the clamour too. David Miliband, the Environment Secretary, proposed a long list of green taxes in a leaked letter to Mr Brown including higher petrol duties andimposing VAT on flights.

With such a consensus developing, a hike in environmental taxes looks inevitable. But don't bet on it. One important person is not convinced - Mr Brown.

The Chancellor believes the Tories are walking up a blind alley if they think green taxes are a magic fix. Treasury calculations suggest that a significant impact on carbon emissions would require a huge increase in petrol duty and domestic energy prices.

Mr Brown won't want to look anti-green and will probably raise air passenger duty and road tax on gas-guzzling cars. But the overall impact will be marginal and he has no intention of hitting consumers and businesses with a raft of new green taxes. Although the public may be alive to the threat to the planet, the Chancellor suspects that their appetite for higher taxes would prove much smaller than the Tories and Liberal Democrats anticipate.

He may well be right. When Tony Blair wrote an article for The Sun about the importance of this week's highly impressive Stern report on the economic case for climate change, the Prime Minister had not bargained for the paper's front-page headline: "I'm saving the world ... YOU lot are paying." Mr Brown recalls the turmoil that engulfed the Tories when they imposed VAT on fuel and power and Labour's own "fuel crisis" of 2000.

Yesterday a poll by Populus for the BBC's Daily Politics programme found a narrow majority in favour of higher taxes even if it meant the end of cheap flights and made driving more expensive. But it also underlined why the Chancellor is cautious. By a margin of about two to one, people believe that green taxes are not really about helping the environment but are designed to raise more money for the Government and think they would unfairly hit poorer people.

Yet Mr Brown is vulnerable to criticism that green taxes have fallen as a proportion of the total tax take to their lowest share since 1993, mainly because of the freeze on petrol duty because of rising oil prices.

Although this looks out of step with the mood of the times, don't expect a sudden blitz of environmental taxes. Mr Brown was frustrated that his strategy for handling the Stern report he commissioned was blown off course when Mr Miliband's leaked letter put the spotlight on to tax - an issue outside the inquiry's remit.

Mr Brown wanted the debate to focus on the need for international action to combat climate change. He will call for a huge expansion of carbon trading and present himself as the statesman with the experience to broker the global deals, as he has already done on aid for the developing world - thus providing a contrast with Mr Cameron's inexperience.

The Chancellor will also argue for action at European level, allowing him to make the case for positive engagement in the EU. The Tories look vulnerable on this point because of their half-hearted support for the EU - and Mr Cameron's plan to pull his MEPs out of the mainstream centre-right group in the European Parliament.

The debate over green taxes highlights the gulf between government and opposition. The Liberal Democrats have good credentials but know there is little chance they would have to implement their proposals. Mr Cameron tells us we must pay the "price of progress" on difficult issues like the environment but is careful to avoid a price tag - for now, at least.

Mr Brown does not enjoy the luxury of opposition and has to get it right. Any decisions he takes will hit people's pockets and the apparent consensus would quickly melt away if he got it wrong. So the scale of green taxes in Britain will be much more limited than this week's headlines suggest. Whoever is in power, the governing party may well be more interested in saving seats than saving the planet.

a.grice@independent.co.uk

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