Green tax plan under review

But chief secretary Stephen Byers warned in the Commons that similar commissions – which have the job of identifying and popularising means of taxing polluters – have had mixed success abroad.

Byers was responding to a report from the Commons environmental audit committee which recommended the establishment of a commission to provide a transparent and neutral forum to advise the government on environmental taxation.

Labour MP Helen Brinton, a senior committee member, said it would invite evidence on proposed environmental taxes and examine the potential pitfalls and trade-offs. She added: ‘The existence of a green tax commission would make it easier to make an overall strategic view of environmental tax making.’

Byers said the tax system had an important role underpinning sustainable development, encouraging work but discouraging pollution.

He said: ‘We are keeping under review the possibility of establishing such a commission. We do not want duplication. There are many organisations doing valuable work in this area, and we shall need to look carefully to see whether a green tax commission can play a valuable role.’

MPs also called for lower VAT on renovating buildings to make brownfield development more attractive.