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United Kingdom

United Kingdom

Green taxes given public airing, labour leading light

Britain's new Labour government is considering introducing environmental taxes to help curb pollution. Deputy Prime Minister John Prescott revealed the government's thinking last month. "Whatever the environmental concern, we must find the best way to deal with it and ensure that the polluter bears the cost of measures required," he said. "Tax is not a popular word. But environmental taxes can encourage industry to find cost-effective, innovative ways of reducing pollution."

He warned that green taxes are not always appropriate; for example, they may have unacceptable social and distributional effects. "What we must do is to consider how to achieve the best package of measures to meet our environmental objectives," he said.

The new government's willingness to talk about taxation as a tool for achieving its environmental aims is in contrast to the previous Conservative administration's dislike of green taxes, in spite of introducing the unpopular value added tax on fuel. Although conceived more as a source of extra revenue than for environmental protection, Labour's pledge to lower VAT on fuel does not find favour with many environmentalists.

Integrated approach

Speaking on World Environment Day, Prescott, who is also Secretary of State for environment, transport and the regions, said his three responsibilities allow the government to tackle issues in a more integrated way. The most widely reported part of his speech was his announcement of a fundamental review of transport policy. He wanted care for the environment to be at the heart of all the government's policies, he claimed. And he promised the UK would be a leader on environmental issues and no longer a laggard.

The day before, environment minister Michael Meacher had re-stated the UK target of a 20% reduction in carbon dioxide emissions by 2010. Mechanisms such as emissions trading and joint implementation (where companies in the west can clock up C02 emission credits by building clean power plant in the developing world) could achieve real benefits, he said. "We want a new and strong drive to develop renewable energy sources, such as wind and solar power," he said.

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