Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

<b>Tax News:</b> Think tank calls for green taxes. By Dawn Smith

by
9th Feb 2006
Save content
Have you found this content useful? Use the button above to save it to your profile.

Gordon Brown is being urged to make a radical overhaul of the tax system to penalise manufacturers of inefficient products and to reward householders for 'green' living.
The environmental think-tank Green Alliance is calling for the new regime, after commissioning research by the Policy Studies Institute which concluded that measures to reduce energy consumption won't work unless accompanied by tougher policy measures.

The Institute's report, published on Thursday, reveals that domestic households currently account for 28% of the UK's greenhouse gas emissions, more than half Britain's water consumption and 10% of waste.

The report proposes a package of measures - called a "Green Living Initiative" - to discourage environmentally damaging behaviour. At a national level it proposes inefficiency charges on products that use comparatively large amounts of energy or water, or generate comparatively greater amounts of waste. These would include products such as disposable batteries and cameras, garden sprinklers and incandescent light bulbs. It also recommends increasing VAT on new homes, from 0% to 5%, while reducing VAT on major refurbishments that meet standards set by the Code for Sustainable Homes. This will make refurbishment an economical alternative to new build, says the Institute.

At a local level, the report recommends Council Tax reductions for households who install insulation and energy conservation measures. It also calls for nationwide water metering to encourage water saving, but linked to Council Tax bands to ensure the measure doesn't impact adversely on poorer households. Finally, it says local authorities should be allowed to experiment with variable waste charging, so that they can charge households for the amount of unsorted rubbish they throw out.

Report author Rebecca Willis said: "Government needs to set the framework to take the pain out of being green and the tax system has a crucial role to play in making that happen." Guy Thompson, director of Green Alliance said: "The stalling of the green tax agenda can only mean the environment is Gordon Brown's blind spot. With rising oil prices and David Cameron raising the stakes, the Chancellor must be looking over his shoulder and pondering his green credentials. He needs to use the Budget and Spending Review to raise the Treasury's game on the environment. A package of green tax measures linked to behaviour change is right on the button."

The report can be downloaded from the Green Alliance website.

Tags:

Replies (1)

Please login or register to join the discussion.

avatar
By User deleted
10th Feb 2006 09:29

Tax under a different guise ....
Why does one need a think tank to come up with solutions that should be blindingly obvious?

There are all sorts of areas that have been overlooked either unintentionally or by design because they are unpalatable.

One such example is aviation fuel. Not only are flights far too cheap to be sustainable, they do in-calculable damage to the stratosphere with their emissions at this level. Furthermore a single flight creates more pollution than any number of 4x4's, light bulbs etc. and yet the reality of this is conveniently overlooked for political capital!

We have the opportunity to make a very real contribution with new sustainable alternative fuels. The problem is that it is unattractive because there is no encouragement in the form of tax incentives; frankly no-one trust the Chancellor not to impose penal taxes if any alternative fuels are introduced.

It is interesting to note that nearly all the measures include an element of tax for the benefit of the Chancellor supported by the flawed reasoning '..to reduce energy consumption won’t work unless accompanied by tougher policy measures..' - this is rubbish

Of course there are solutions that do not directly line the Chancellors pocket and two of them are outlined below:

- water meters mandatory on all new build

- solar panel mandatory on all new build. Even raising domestic water temperatures by 5-10 degrees has a huge impact

Other areas such as Ground Source Heat Pumps provide greater sustainability, although there are physical limitations to this

Take one example of Government commitment in the alternative energy area - the grant for solar panels was reduced by £100 a couple of years ago. Hardly a commitment by any standards

The real question has to be whether this is just another indirect tax or are the 'Green' levies really being applied to resolve Green issues - one suspects not

Maybe a principle of 'ear-marking' funds raised from taxes should be applied in this area (and others). But then this concept has always been an anathema to Chancellors

It has never been about 'Green' thinking but primarily ever more ingenious ways of raising tax

Thanks (0)