Archived press release

Budget 2001: Green yesterday but Brown today

7 March 2001

The Government was today accused of "facing in two directions at once" after today's Budget cuts in fuel duty.

• Yesterday,Prime Minister Tony Blair looked for green support at the General Election, and spoke about climate change and sustainable development as "the greatest challenge we face this century"

• Today, Chancellor Gordon Brown made yet another unnecessary concession to fuel tax protests by cutting the price of ultra-low sulphur petrol by 2p a litre and unleaded petrol by 2p a litre until June 14th. Ultra-low sulphur diesel (100% of the diesel market) has been cut by 3p a litre.

The effect will be to encourage more car use, increase congestion and pollution, lead to ever more damaging new road schemes, and make the problem of climate change even worse. British motorists already pay less overall in tax than drivers in the Netherlands, France, Denmark, Italy and Ireland. Car owners in Britain use their vehicles more often than owners in any other European country. Transport is the fastest growing source of CO2 emissions, the main climate changing gas. According to Professor David Begg, Chair of the Government's Commission for Integrated Transport, "for every 1% in fuel prices we see 0.18% knocked off traffic growth" [Guardian, 6.3.2001]. Vehicle Excise Duty cuts have also been extended to 70% of cars on the road. Meanwhile, the Tories are promising 3p a litre more off petrol taxes than Gordon Brown's cut today.

Commenting Charles Secrett, Executive Director of FOE, said:

"Yesterday, the Prime Minister talked powerfully about the dangers of climate change, and the need for co-ordinated action across Government to protect our environment. Today, the Chancellor tried to grub up a few more votes with a quick cut in petrol taxes.

New Labour goes on about joined-up Government. But it seems that No 11 Downing Street can't even hear a green message from No 10 next door. The door from No 10 to No 11 may be always kept open, but Mr Brown's mind has clearly been kept firmly closed. Despite some welcome small measures elsewhere in the Budget, the cut in car taxation is a disgraceful populist gesture that badly undermines any bid the Prime Minister may want to make for environmental credibility. Labour can count itself lucky that, grim as this tax cut is for the environment, Mr Portillo and the Tories are promising to do even worse."

Points to welcome include the Chancellor's first ever Budget mention of Labour's target to cut carbon dioxide emissions by 20% by 2010 over 1990 levels (compared withthe less radical Kyoto targets), the rise in landfill tax (already announced in the last Budget), reductions in VAT on brownfield housing sites in designated areas, and tax relief for innovative environmental technology. Points missing include no measures to green agriculture and food production - for example a pesticide tax, and no windfall tax on oil company profits.

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Published by Friends of the Earth Trust