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Last chance for chancellor - FOE says 1998 must be year of green budget

12 March 1998


Today, Friends of the Earth warns Chancellor Gordon Brown that next week's Budget is the last chance for Labour to prove its green credentials. Britain's leading environmental pressure group publishes the most comprehensive Green Budget package ever put together in the UK. The package has been tested through Cambridge Econometrics' highly respected MDM-E3 (economy-environment-energy) economic model. FOE argues that the money raised from taxing "bads", such as polluting fuels and valuable resources, should be used to fund "goods" such as lower taxes on jobs, and nationwide energy conservation and public transport schemes. New spending should target the poor and vulnerable.

FOE'S GREEN BUDGET PACKAGE

FOE's Budget would include measures on:

1.Transport: to achieve significant reductions in CO2 emissions and help deliver an integrated transport system:

  • Raise the road fuel price escalator to 9% raising an extra 1.8 billion after two years and cut CO2 emissions by 3.5% by 2010
  • End mileage banding and 'free fuel' tax concessions for company cars raising 660 million per year
  • Tax private non-residential parking raising 400 million a year
  • Vary Vehicle Excise Duty based on emissions and fuel efficiency
  • Cut back the roads programme (including the A650 Bingley relief road (13 million), the A556(M) trunk road (93.4 million) and the M25 Junctions 12-15 widening (93.8 million) and double public sector funding to boost bus-use, cycling and walking in congested urban areas.

2.Energy: to meet CO2 reduction targets, tackle fuel poverty, and encourage development of the renewable energy sector:

  • Cut tax breaks for the oil and gas industry: remove the generous tax breaks on Petroleum Revenue Tax of over 1 billion p.a.
  • Establish a nation-wide home energy conservation programme, to target the 8 million fuel-poor households through a fifteen year programme insulating 500,000 cold and energy-inefficient homes each year and creating up to 50,000 jobs
  • Extend the promised cut in VAT on energy saving materials to all social housing

3. Shifting tax from 'goods' to 'bads'

  • Extend and increase the waste ('landfill') tax to cover incineration, as well as landfill, and increase rates by 2 per tonne per year, raising an additional 700 million in 2000,
  • Tax primary aggregates at a starting rate of 1 a tonne rising each year thereafter by an additional 1 per tonne, raising 500 million in 2000

4. New incentives to reduce environmental damage and encourage innovation in key sectors of the economy.

  • Harmonise VAT on refurbishment and conversion of empty properties for housing and new build housing at 5%
  • Introduce charges on pesticides and chemical fertilizers to fund policies that encourage the conversion from chemically intensive to organic farming systems
  • Provide tax incentives for mainstream industry to invest in innovative environmental technologies

THE EFFECTS OF RESPENDING ON THE ENVIRONMENT AND FOR THE POOR

FOE show how their "polluter pays" proposals would (by the year 2010):

  • increase tax revenue by 28 billion per year
  • cut employers' National Insurance Contributions by up to 3%,
  • provide funds for energy conservation schemes, creating up to 50,000 jobs and tackling fuel poverty, and for a efficient, affordable and reliable public transport system creating up to 130,000 jobs
  • increase total employment by up to 391,000 and reduce unemployment by 166,000
  • cut overall business costs in sectors of the economy that employ over 88% of the UK workforce and account for 76% of GDP and 60% of UK exports
  • increase GDP by 0.2%, and cut CO2 emissions by 7%: a significant contribution to the Government's 20% target.

Charles Secrett, Director of FOE said today:
"This is truly the Chancellor's last chance to deliver on his environmental promises. We have presented him with the most detailed and authoritative Green Budget package ever put together in this country. Our package is good for jobs, good for the poor, and good for the environment. We must stop climate change, curb excessive traffic, cut health-threatening air pollution and slow excessive consumption We must invest in jobs, in energy efficiency and in public transport. Our package shows how both are possible. Most Labour supporters - and all environmentalists - know this is true. We will not forgive Gordon Brown if yet again he fails to live up to Labour's solemn promise to the people to be the first truly green government ever".

PLEASE NOTE

Friends of the Earth will provide spokespeople on green Budget issues before or on Budget day. Radio interviews can be recorded or conducted live on our ISDN facility.


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

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Published by Friends of the Earth Trust

 

 

Last modified: Jul 2008