Environmental Audit Committee

12 February 2002

Brown goes cool on green issues

The Government has failed to begin this Parliament with an imaginative and creative approach  to the environmental tax agenda to match the commitment made in 1997.  Few of the environmental tax measures contained in last November's Pre-Budget Report are significantly new, and the Treasury's strategy of "shifting the burden" of taxation onto environmentally damaging areas has stalled.

This is the main conclusion reached in the latest report by the Environmental Audit Committee, Parliament's watchdog created to audit the Government's progress on sustainable development.

John Horam, the Chairman of the Committee, said today: "The Government's zeal for environmental tax reform appears to have fizzled out and the dead hand of the Treasury is in danger of damping further progress.  It is also particularly outrageous that the Treasury is proposing to keep secret sustainable development reports submitted as part of Spending Review 2002.  This will make it impossible for Parliament to hold departments properly to account."

Other conclusions reached by the Committee include the following:

• The Committee is concerned about the extent to which confusion and inefficiency can result from the growing complexity of policy instruments in the energy sector.  The Government might therefore wish to explore the scope for rationalising these instruments over time.

• The Treasury must take advantage of the widespread consensus among both industry and environmental groups that the rate of the landfill tax should be radically increased, and the Government should not wait until 2004 to do so.  To maintain appropriate differentials and prevent incineration becoming an easy option, the Treasury should explore the scope for introducing an incinerator tax.

• The Treasury should, as a matter of some urgency, carry out research on the impact of removing the perverse fiscal incentive to build on greenfield sites.