UK environmental tax plans panned

MPs claim increasing lack of clarity on taxes, while government, business, debate climate change

Ambitious UK government plans to introduce environmental taxes have become unclear and uncertain since the country's "greenest ever" budget last March, a committee of the lower house of parliament claimed today. The House of Commons environmental audit committee renewed its calls for a green tax commission to ensure consistency and consensus between government, industry and NGOs.

In a report foreshadowing the 2000 national budget due on 3 March, the committee levels particular criticism at the government's abandonment of immediate plans to introduce a pesticides tax (ENDS Daily 1 February). It also questions the government's handling of a proposed tax on virgin aggregates, claiming that industry has been left unclear over its own proposal for voluntary measures (ENDS Daily 4 May 1999).

The committee is less critical of the government's proposed industrial energy tax, the climate change levy, although it highlights potential problems with the environment ministry's negotiations with energy-intensive industries over reductions in their taxes (ENDS Daily 22 December 1999).

In a related development, prime minister Tony Blair and his deputy John Prescott met business leaders at a seminar, also attended by EU environment commissioner Margot Wallström, to discuss the challenges ahead and the potential benefits of moving to a low-carbon economy. According to the environment ministry, the economic opportunities of moving to an energy efficient economy were discussed and, in particular, the government reiterated its support for a domestic emissions trading scheme (ENDS Daily 22 December 1999).

Business leaders called for climate change levy reductions or corporation tax exemptions to get a pollution control permit system off the ground. Chris Fay, leader of the advisory committee on business and the environment said: "There has to be an incentive for companies to put themselves on the block by agreeing targets. Without incentives, it will be very hard to get the system going."

Follow Up:
House of Commons environmental audit committee. For information on the low-carbon economy meeting, see UK environment ministry, tel: +44 20 78 90 30 00, and official press release.

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