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BROWN BACKS BUSINESS GREENS

27 Nov 2001

Friends of the Earth has welcomed some of Gordon Brown's plans to encourage investment in green fuels and technology as a “useful fillip for green technologies and innovation”. But the environment group has warned that it will not compensate for the incentive to drive given by fuel tax cuts in the last Budget.

A possible tax on foreign lorries on British roads is welcome. But in March, Gordon Brown cut duty on ultra-low sulphur diesel (almost all diesel sold) by 3p a litre. Research by Malcolm Fergusson of the Institute for European Environmental Policy, commissioned by FOE, shows that in a full year, UK hauliers will benefit from fuel duty cuts by as much as £422 million. In addition, rebates and reductions in Vehicle Excise Duty [VED] have benefited hauliers by a further £227 million a year. The owners of the largest lorries on UK roads could benefit by as much as £6,000 a year for each vehicle.

The Chancellor's tax breaks for cleaner fuels and vehicles will not reverse the growth in journeys by road, or stop transport being the UK's fastest growing greenhouse gas polluter.The Chancellor must make it clear that road fuel will rise steadily over the next five years. His cuts in road fuel duty were a £1.5 billion incentive to drive.

The Chancellor made little progress on his commitment to shift tax off jobs and work and onto pollution and waste. He has missed a vital opportunity in this first Pre-Budget speech of the new Government to set out a clear strategy for shifting taxes to help deliver the low-carbon,low-waste economy that Prime Minister Tony Blair has promised. Obvious sectors for action includre agriculture (e,g, pesticides tax) and cutting tax breaks to incinerators.

Commenting, FOE Head of Research Dr Tim Jenkins said:

    “Gordon Brown's move to encourage investment in green fuels and technologies is welcome. But it won't compensate for the incentive to drive cars given in the last Budget.Nor will a new tax on foreign lorries compensate the environment for the giant bung given to UK hauliers in the last Budget. And the Chancellor missed his first real chance since the Election to set out systematic Treasury thinking on how to shift taxation off jobs and on to pollution and waste.”

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