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Government slammed over eco tax strategy

Date: 29 July 2011

The Treasury has been criticised by its own Environmental Audit Committee, which slammed the Budget 2011 tax changes for "undermining public trust in green taxes".

Cutting a penny from fuel duty while not offering any incentive to switch to lower carbon transport alternatives "sends out the wrong signals", according to the committee's report. "The treasury needs to stop giving green taxes a bad name," said committee chair Joan Whalley, MP. "Recent Budgets have created the perception that environmental taxes are simply being used to pinch extra pennies from the people."

"Politicians should use green taxes more carefully to challenge and change the most polluting activities," she continued. "The Government must put its money where its mouth is and put greening the economy at the heart of its plan for growth."

The committee suggested ring-fencing some of the revenue from perceived eco taxes, using it to cut public transport fares for example.

The Environmental Audit Committee also called for additional tax measures to subsidies the take-up of lower-emitting vehicles.

"Additional tax measures could be taken to persuade customers to purchase electric vehicles such as a 'feebate' scheme, where a new purchase tax on relatively high CO2-emitting vehicles would subsidise lower-emitting vehicles within the same class," read the report. "This would be fiscally neutral."

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