Sean O'Grady: Darling has the chance to practise what he preaches

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The Independent Online

A week today, the Chancellor of the Exchequer, Alistair Darling, will rise in the House of Commons to deliver his first Budget speech. For it not to also be his last Budget speech he will have to display a rather better mix of skill, imagination and judgement than has yet been in evidence. Fortunately for him there is a very easy way for him to begin his climb back to credibility – his policies need to adopt a green hue as deep and impressive as the snow-white tones of his barnet.

Cynical as it may be, nothing would distract the voters' attention from his dismal botches on non-doms, capital gains tax and Northern Rock than an eye-catching initiative on the environment. A plastic bag tax would be the simplest way to steal favourable headlines for the next day, and from newspapers not normally well disposed to the Chancellor.

Mr Darling could even show the Commons he practises what he preaches; the famous battered red briefcase he could wave to the cameras on Wednesday was first used by William Gladstone in 1860: few of us can claim to have kept our bags for quite that long.

The plastic carrier tax was a notable success in Ireland and, at a guess, might raise £50m a year in Britain. A tidy sum, but utterly irrelevant in the grand context of the public purse's total tax take of about £550bn. Still, that's not the point.

More substantively, Mr Darling could announce some positive plans to bolster London's ambitions to become the world centre for trading in the carbon emission market. He could do as the Environmental Audit Committee of MPs asks and increase aviation duty, put more aside for low-carbon technology and increase duty on petrol and diesel.

However, to get away with any green taxes he will have to steal another Tory idea, and compensate for such changes with cuts in personal taxation. That would make the notion politically acceptable and win even better coverage. To be fiscally neutral and positively green would be wise on economic grounds too.

Mr Darling's central problem is simply put: he is skint. Or, more brutally even than that, he is skint and there isn't a thing he can do about it. August bodies such as the Institute for Fiscal Studies and the National Institute for Economic and Social Research estimate that he's about £8bn short. He is borrowing too much, and risks breaking the Government's own fiscal rules – even before we take account of Northern Rock, all of whose liabilities are now headed for the public accounts like a particularly ill-tempered asteroid. Yet Mr Darling can't raise taxes – green or otherwise – either, for fear of stalling the economy and making life even worse for himself.

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