Leading article: Make the polluters pay, and give the others a break

Share
Related Topics

Alistair Darling's first Budget tomorrow is already being widely referred to as "green". We can but hope. This Government has a lamentable record on environmental taxation. While ministerial rhetoric on the need to reduce carbon emissions has soared into the stratosphere, environmental levies have actually fallen as a proportion of overall taxation under Labour. As the House of Commons Environmental Audit Committee pointed out last week, its share has fallen from 9.5 per cent in 1999 to 7.3 per cent today.

Mr Darling has a chance tomorrow to show serious commitment to the principle that the polluter must pay. There is talk of a rise in fuel duty, higher taxes on heavily polluting vehicles, a replacement of air passenger duty with a tax on each flight and moves to expand carbon trading. That is all to the good, although any serious policy would be incomplete without plans for VAT on airline tickets and jet fuel. Yet there is a significant danger in all of this, namely that "green" taxes will be seen as purely money-raising measures, rather than as part of a serious attempt to safeguard the environment.

Environmental levies need two key features. The first is that they be substantial enough to change behaviour. The second, and no less important, is that the proceeds are seen to be channelled into green schemes, or to provide tax breaks for those who make more environmentally friendly choices.

The London Mayor, Ken Livingstone, showed how it needs to be done with his congestion charge on cars. The proceeds of the charge were invested directly in improving the bus network in the capital. People grumbled, but they could see where their money was going and the environmental benefits it brought. The Chancellor needs to follow this example. Tomorrow he should announce that all the proceeds from new environmental levies will be funnelled into green schemes. One good target would be a hefty increase in funding for the Low Carbon Buildings Programme, which offers grants for households to generate their own electricity through solar panels, wind turbines or ground-source heat pumps. Another worthy recipient would be a major push to encourage energy conservation in homes.

Without such measures, there is a serious risk that green taxes will be discredited by political association. People will accuse the Government of using spurious "green" rhetoric to justify raising taxes. This is precisely what happened when Gordon Brown, as Chancellor, announced a pitiful £5 rise in the air passenger duty in 2006. Yet it is difficult to be optimistic that the Government is about to change its ways. This is because Mr Darling has little room for manoeuvre. He is faced with a housing market on the turn, slowing growth and worrying inflationary pressures. It is true that the blame for such adverse conditions cannot be pinned on the Government. But what ministers cannot escape responsibility for is how ill-prepared we are fiscally to respond to them. Mr Darling has been bequeathed a legacy by Mr Brown of rising public borrowing. Rather than building up a surplus in the times of high growth, the Government spent it. Now we have no fiscal cushion.

A slowing economy will mean less Government tax income from capital gains tax, company profits, stamp duty and VAT.

The upshot is that it is easy to see additional green taxation revenues being swallowed up to fill the gaping hole in the public finances, rather than diverted to environmental schemes. If Mr Darling stands up tomorrow and announces such a cynical plan, his first budget will be as environmentally-unfriendly as any put forward by his predecessor.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Tradewind Recruitment: English Teacher

Negotiable: Tradewind Recruitment: This post arises as a result of the need to...

Tradewind Recruitment: Class Teacher Required ASAP In Uminster

£120 - £150 per annum: Tradewind Recruitment: I am recruiting on instruction o...

Ashdown Group: Head of Finance - Financial Director - London - £70,000

£70000 per annum: Ashdown Group: Head of Finance - Financial Controller - Fina...

Ashdown Group: Marketing Executive - Wimbledon, SW London

£24000 - £28000 per annum + benefits: Ashdown Group: Marketing Executive - Wim...

Day In a Page

Read Next
 

I’m not sure I fancy any meal that’s been cooked up by a computer

John Walsh
Labour leader Ed Miliband delivers a speech on his party's plans for the NHS, in Sale, on Tuesday  

Why is Miliband fixating on the NHS when he’d be better off focussing on the wealth gap?

Andreas Whittam Smith
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness