Archived press release

Green tax changes for jobs, economy and environment

30 January 1998

Green tax reform could create jobs and boost the competitiveness of Britain's major exporters, a new report from Forum for the Future and Friends of the Earth shows today.The report presents "the most detailed and sophisticated economic modelling of eco-tax reform in the UK to date". It was commissioned from Cambridge Econometrics, and uses their authoritative MDM-E3 economic model. It is based on the principle of shifting taxation from labour onto activities that deplete and pollute the environment. It will be launched at a Business Briefing on Friday 30th January.

The study show that a green tax reform package, based on options now being considered by the Government, could

• create 249,000 jobs by 2005 and 391,000 by 2010, with the top seven winning sectors of the economy being Health and Social Work, Education, Business Services, Public Administration, Clothing, Aerospace, and Retailing

• reduce overall business costs for sectors of the economy that employ over 88% of the UK workforce, and account for 76% of GDP and 70% of UK exports from economic sectors ranging from Food to Mechanical Engineering and Insurance to Pharmaceuticals

• reduce pollution and waste, including a 7% reduction in CO2 emissions by 2010 from 1990 levels.
  

The FOE/Forum package includes the following green taxes:

• a carbon/nuclear tax levied on commerce and industry rising from $1 per barrel of oil equivalent in 1998 to $13 in 2010;

• an annual increase of 2 in the rates of the landfill tax raising the existing 7 and 2 bands to 33 and 20 per tonne;

• a tax on waste disposal by incineration equivalent to the lower rate of the landfill tax;

• a road fuel duty escalator of 9% rather than the promised 6%;

• a tax on primary aggregate production of 1 tonne in 1998 rising annually to 13 per tonne by 2010;

• removal of company car perks by ending the perverse mileage banding system and under-taxation of free fuel;
  

and

• a tax on private car parking at the workplace of 1 per week per space in 1998 rising to 13 per week per space in 2010.
  

The package raises 5.1 billion by 2000 and 27 billion by 2010. The modelling uses this revenue to reduce employer's National Insurance Contributions to only 3% by 2010.

Paul Ekins, Programme Director of Forum for the Future said:
"This study shows that improving the environment can benefit, rather than damage, the overall competitiveness of the UK economy. The businesses in the winning sectors should be lobbying the government hard on starting to get an ecological tax reform underway."

Charles Secrett, Director of FOE said today:
"Gordon Brown must use the Spring Budget to deliver a substantial eco-tax reform package. Our report shows that by doing so he will simultaneously increase environmental protection, create large numbers of new jobs and strengthen the UK economy. March 17th will be the acid test for New Labour's commitment to deliver its promise to put the environment at the centre of the tax system (or jobs and the environment)."

Notes to Editors

(1) The Business Briefing will take place from 2pm to 4pm at the Holiday Inn, Kings Cross.There will be a buffet lunch at 1pm. The event will be hosted by Stuart Sweetman,Chairman of Post Office Counters Ltd, and Chairman of the Working Group on Climate Change of the Government's Advisory Committee on Business and the Environment.Speakers are Charles Secrett, Director of FOE; Dr Paul Ekins, Director of Forum for the Future; Dr David Fisk, Chief Scientist at the Department of Environment, Transport, and the Regions, and Dr Terry Barker, Chairman of Cambridge Econometrics. (2) The Policy Briefing is entitled "Ecological Tax Reform, Environmental Policy and the Competitiveness of British Industry", and costs 5. The Technical Report of the study is called "Industrial Benefits from Environmental Tax Reform in the UK" and costs 28 (add 10% for p&p for mail orders). Both publications are available from Forum for the Future.

If you're a journalist looking for press information please contact the Friends of the Earth media team on 020 7566 1649.

Published by Friends of the Earth Trust