Gordon Brown set to use final Budget to impose stiffer green taxes

Leaked correspondence between environmental chief and Chancellor champions tougher levies on vehicle drivers and the aviation industry

Written by David Jetuah

Accountancy Age, 30 Oct 2006

Environment Secretary David Miliband has floated a broad package of green taxes designed to change people's behaviour in a bid to offset global warming, but
motorists and airline passengers are likely to bear the brunt of the reforms as part of the government’s designs.

His proposals, in a leaked letter to Gordon Brown, include hikes on fuel and air passenger duty as well as increased road tax for drivers of the most polluting vehicles. The document also outlined a controversial policy which would see forecourt prices kept at a certain level, irrespective of a drop in oil prices.

This would ‘maintain pressure on the cost of motoring without individual announcements on fuel duty needing to be made’, wrote Miliband.

The leak preceded a report, commissioned by the Chancellor, which will warn of the cost of climate change unless action is taken immediately. Mr Miliband also championed a move to curb greenhouse gas emissions, stating that the tax system was a vital tool.

'Market-based instruments, including taxes, need to play a substantial role,' he believed. 'As our understandings of climate change increases, it is clear more needs to be done.’