The green tax con: Climate change levies are swallowed up by Treasury



Millions of people believe soaring green taxes are simply an excuse to take more money from their pockets, MPs say.

In a hard-hitting report they warned that environmental levies - supposedly there to help the planet - are badly tarnished.

They called on the Government to 'put its money where its mouth is' and use receipts from fuel and aircraft duties to improve public transport rather than just fill Treasury coffers.

Millions believe green taxes are an excuse to take more money from people's pockets

The Environmental Audit Committee also urged ministers to restore the public's trust by using green taxes more carefully and more openly.

The report came just days after official figures showed that green taxes topped more than £40billion for the first time last year. Most fell on motorists, who paid a highest-ever amount of £27billion in fuel duties.

But air passengers paid a further £2billion, while the tax on rubbish, landfill tax, for the first time raised more than £1billion. A further £½billion came from green taxes on energy companies which are passed on to consumers.

Green taxes are forecast to rise as a proportion of all taxation until 2014. After that they will level out, the report said.

Joan Walley MP: 'Recent Budgets have created the perception that environmental taxes are simply being used to pinch extra pennies from people'

Joan Walley MP, chairman of the House of Commons committee said: 'Recent Budgets have created the perception that environmental taxes are simply being used to pinch extra pennies from people.



'Politicians should use green taxes more carefully to challenge and change the most polluting activities.

'The Government must put its money where its mouth is and put greening the economy at the heart of its plan for growth.'

Successive governments have introduced a host of green taxes - from hikes in fuel duty to hidden levies on domestic fuel bills to help subsidise wind farms.

The MPs' report said taxation could play a key role in protecting the environment by penalising polluters and encouraging people to lead more sustainable lives. But for the taxes to work they have to be straightforward and fair, they warned.

The report said: 'It cannot be all stick and no carrots. A shift to environmental taxes must be accompanied by a corresponding reduction of taxes on the things that are valued by society - such as jobs, incomes and profits.'

Using the receipts from green taxes for environmental ends would help restore confidence in the tax system, the report said.



'The Treasury should start to rebuild trust in environmental taxes by ring-fencing some of the revenues raised from fuel duty to cut soaring train and bus fares,' said Mrs Walley.

The Campaign for Better Transport said revenues from fuel duty should be used to improve public transport.



Spokesman Sian Berry said: 'The Government should be helping people to switch away from environmentally damaging behaviour, but by actively raising train fares and cutting support for bus services, it is doing the opposite.'

Critics say too many green taxes are stealth taxes and have called for greater transparency. Energy watchdog Ofgem estimates the average householder pays around £100 a year in hidden green taxes on their electricity and gas bills.