Green taxes hit 25 year low

11.35.01am GMT Mon 10th Sep 2007

Green taxes have fallen for the seventh successive year and are now at their lowest level of GDP for a quarter of a century, official figures obtained by the Liberal Democrats show.

Green taxes - which include fuel duty, landfill tax, hydrocarbon duty, air passenger duty and others - took just 2.7 per cent of national income in 2006 compared with a peak of 3.6 per cent in 1999. This is the lowest level since 1981 under Mrs Thatcher's Government.

Commenting, Liberal Democrat Shadow Environment Secretary, Chris Huhne MP said:

"Ever since the fuel duty protests in 2000, Gordon Brown has run scared of any tough decisions on the environment. Mr Brown has cut green taxes by a fifth even though they are crucial to changing our behaviour.

"He has cut flood defence and climate research budgets. He vetoed the plan to toll road freight, and he ditched the legal requirements on big companies to report their environmental impact in operating and financial reviews.

"Now he has even downgraded the cabinet committee on the environment, which will now only be a sub-committee of the economic committee chaired by the Chancellor.

"Sadly, all the evidence is that Mr Brown is not green and does not understand the key threat posed by climate chaos. Polluters must pay, we must shift tax from people and on to pollution."

ENDS

Notes to Editors

1. The latest figures published by the Office for National Statistics show that in 2006 environmental taxes declined to 2.7% of British GDP. See page 264 of the United Kingdom National Accounts 2007. http://www.statistics.gov.uk/downloads/theme_economy/Blue_Book_2007_web.pdf.

2. In 1991 environmental taxes were 3.0% of GDP, in 1997 3.4% and in 1999 3.6%. In 1997 the figure was 3.4% of GDP. In 2006 the figure was 2.7% of GDP. In the latest figures released this month the percentage for 2005 has also been revised down from 2.9% to 2.8% of GDP.

3. Environmental taxes included are: duty on hydrocarbon oils, VAT on duty, fossil fuel levy, gas levy, climate change levy, hydro-benefit, vehicle excise duty, air passenger duty, landfill tax and the aggregates levy.

4. The Liberal Democrats published plans this week to reverse the decline in environmental taxation, overhauling vehicle excise duty so that the most polluting new cars pay up to £2,000 a year while the cleanest new cars pay nothing. They would push for a European-wide tax on aviation fuel, which is currently exempt from fuel duty, and reform the air passenger duty so it is based on the emissions of the flight regardless of the numbers flying. Through this 'green tax switch' the Liberal Democrats have pledged to use the extra revenue to cut income tax to 16 pence in the pound, the lowest level since 1916. The paper 'Zero Carbon Britain - Taking a Global Lead' will be discussed at the Autumn Conference.

http://www.libdems.org.uk/news/liberal-democrats-reveal-plans-for-zero-carbon-britain.13117.html

5. Figures obtained by the Liberal Democrats show that environmental taxes last fell below 2.7% in 1980. From 1982-6 they did not fall below 2.9%.