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

Recruitment Genius: Sales Administrator - Spanish Speaking

£17000 - £21000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - German Speaking

£17000 - £23000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - Japanese Speaking

£17000 - £23000 per annum: Recruitment Genius: If you are fluent in Japanese a...

Recruitment Genius: Graphic Designer - Immediate Start

£16000 - £25000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

Read Next
 

Errors & Omissions: Hang on – that’s not how it’s supposed to be written

Guy Keleny
Rafael Nadal is down and out, beaten by Dustin Brown at Wimbledon – but an era is not thereby ended  

Sad as it is, Rafael Nadal's decline does not mark the end of tennis's golden era

Tom Peck
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test