Sponsored by
Justine Greening: Green tax is half right – it's tax but not green
FOR the past fortnight, the Treasury has been in the eye of a Labour storm over its sneaky withdrawal of the 10p income tax rate. Quite right, too, as it has got caught out for putting politics ahead of the public interest.
But it is now emerging that when Alistair Darling delivered his Budget just over a month ago, withdrawing the 10p income tax rate was not the only tax rise millions of people up and down the country are now facing.
The centrepiece of Mr Darling's so- called "green Budget" was changes to Vehicle Excise Duty rates on cars. Mr Darling said the measures were aimed at "cutting taxes for those who cut carbon emissions". No hint of a tax rise there. If anything, it sounded like a tax cut, but it didn't work out that way.
I admit describing the changes to Vehicle Excise Duty tax as a '"green tax" is half right. Yes, it is a tax – that half's right, but no, it is not especially green.
Let's take a look at the tax impact first. Even though the Government admitted that increases in VED would bring in millions more in revenue over the next few years, it was only when details were disclosed later that it was revealed just how much of a tax hike the new rates really are.
In fact, according to the Government's own figures that they've now had to release to me, the total increase in VED tax more than doubles from just under 2bn last year to well over 4bn in 2010/11.
So it's a massive tax hike, but it's a green tax, so that's a good thing, isn't it? Surely if we're all paying that much more tax, the Government must have thought it would similarly reduce CO2 emissions just as dramatically?
Fat chance and that's the catch. Because at the same time Ministers were admitting just how much money these changes rake in, they were also admitting that the CO2 emissions impact will be virtually nothing – reducing the total emissions of motor vehicles in the UK by just one-tenth of one per cent. An accountant would round that down to zero.
Make no mistake, just in the same way that the other big tax raising measure – whacking up alcohol duty – was nothing to do with tackling binge drinking, raising VED is really nothing to do with tackling climate change.
Raising VED rates wasn't about saving the planet, rather it was about saving the Treasury. Whether you're a pig farmer in Thirsk or working in Harrogate's thriving shops, your pocket is viewed as a bottomless money pit by this Government – a never-ending cash reserve that the Chancellor can dip into over and over again. So this is a naked tax rise and it doesn't help the environment. Is it at least fair?
No, again it even fails the fairness test. As you delve more into the figures that Ministers have released, the picture gets worse, because the people bearing most of the total increase in tax are yet again families, and people with smaller cars – most likely the young and elderly.
People with family cars, such as a Ford Mondeo, Renault Scenic or Citron Picasso, or smaller cars, will be paying 375m more into the Treasury coffers this year alone.
It gets worse. By 2010/2011, they'll be paying 1.2bn a year more. Treasury Minister Angela Eagle has admitted this week that owners of a Nissan Micra could be paying 25 per cent more Vehicle Excise Duty
next year.
Just like the miserly withdrawal of the 10p income tax rate, this bit of the Budget will also hit the people who can least afford paying more tax.
And it hits them at the worst possible time – when mortgages, food prices, energy prices, everything, is getting more expensive and less affordable.
How can a government that behaves in such an underhand way have
any credibility when it lectures us to do our bit in switching off lights, or saving energy?
Green taxation can work, but not this way.
As much as anything, this is a matter of trust. If we can't trust the Government on the environment and tax, we can't trust them on anything.
Justine Greening is the Shadow Treasury Minister. Born in Rotherham, she is the Conservative MP for Putney
Email to a friend
Print this page- Leeds lose Ward to Palace: Is there anyone they can afford now?
- Sheffield Wednesday leaving it late to hijack Leeds United over Ward
- As Snodgrass dithers over Leeds, Warnock throws a lifeline
- Ball is in Leeds United’s court over contract - Snodgrass
- Police turning blind eye to Asian voter fraud, says MP
Looking for...
Featured advertisers
Jobs
Search for a job
Motors
Search for a car
Property
Search for a house
Weather for Yorkshire
Saturday 26 May 2012
Today
Sunny
Temperature: 8 C to 21 C
Wind Speed: 17 mph
Wind direction: East
Tomorrow
Sunny
Temperature: 9 C to 22 C
Wind Speed: 13 mph
Wind direction: East
