Chancellor to incentivise green behaviour

Airlines and supermarkets have spoken out about their fears on green taxes that could be revealed in next week's budget.

Ministers had warned retail chiefs that a new plastic bag tax labeled by some as 'plas tax', would be imposed unless more was done to reduce the amount generated.

The high street chains have agreed to enforce a 25% decrease by the end of 2008 however only a 14% increase has so far been achieved.

Tesco the biggest British retailer has remained defiant on charging for plastic bags despite pressure to set the example. Asda has a 'bag on request' initative and Marks & Spencer has announced a 5p bag charge in its food hall with B&Q following suit.

Aviation is also forecast to receive radical changes to its tax structure in the next budget, The Times reported.

Darling is said to be considering charging tax on flights regardless of the amount of people that are on it. Aviation sources are even speculating that there could be plans to relate the amount of tax paid to the amount of emissions produced by an aircraft.

This is considered a good move by environmentalists' who believe this will encourage airlines to replace old, high emission aircrafts with newer more efficient ones, which are considered to be up to 25% better on fuel economy.

The chancellor also has plans to now tax private jets and cargo flights which currently avoid paying taxes and the government hopes to increase revenue from aviation by 25% to £2.5bn.

Goldman Sachs said yesterday that 'this seems a fairer system and it discourages empty flights and also aligns taxes and emissions more precisely.'

Further reading:

Alistair Darling to reveal budget eco-taxes

Chancellor faces growing calls to deliver green budget