Households paying £800 too much in green taxes, says report

James Kirkup, Political Correspondent
Last Updated: 12:01am BST 28/08/2008
Households are paying hundreds of pounds more in "green taxes" than is justified by the environmental cost of their carbon emissions, a new study claims today.

Britain paid £19.6 billion too much in green taxes lastyear, or £783.34 per household
The Taxpayers' Alliance has calculated that every household in the UK is paying as much as £800 a year more in environmental taxes than is necessary.
Its analysis claims the Treasury made £20 billion in "excess" revenue from environmental taxes last year - from supposedly "green" levies on motoring, energy bills and waste disposal.
The report is the latest attack on the Government's use of green taxes and will strengthen suspicions that ministers are using the environment as a cover for revenue-raising measures.
The TPA said its figures showed ministers were "wrapping revenue-raising tax hikes in a green banner." However, the Treasury rejected the group's figures as misleading.

The study focuses on five so-called "green" taxes: fuel duty; Vehicle Excise Duty - or car tax as it is commonly known; the landfill tax paid by council tax payers; the climate change levy and the renewables obligation.
These final two are both levied on utility bills and are intended to fund investment in renewable energy sources.
The TPA report calculates that in 2007/08, the Exchequer took a net £24.2 billion from those taxes, after the costs of maintaining the roads network are subtracted. The equivalent financial "cost" of Britain's carbon dioxide emissions is significantly less, it says.
According the methods used by the United Nations' Intergovernmental Panel on Climate Change, the UK's emissions in 2007 did £4.6 billion worth of damage to the environment.
By that figure, Britain paid £19.6 billion too much in green taxes last year, or £783.34 per household.
The Department for the Environment, Food and Rural Affairs uses a much higher figure, based on the Stern Report by Sir Nicholas Stern, a former Treasury economist. It says that the cost of Britain's emissions is £16.3 billion.
But even using that total, the annual "excess" green tax revenue is £7.9 billion or £315.81 per household.
Matthew Sinclair, the author of the TPA report, said green taxes were putting an "unfair burden" on families and companies.
He said: "With the credit crunch squeezing household budgets, people can ill afford this extra tax grab. It's dishonest and unjust for politicians to wrap revenue-raising tax hikes in a green banner. The Government are talking about raising taxes even further, but our conclusions show that green taxes should be kept as they are or cut."
By far the biggest "green tax" cited by the TPA is fuel duty. Levied at 50.35 pence per litre, the tax raised a gross total of £24.9 billion for the Treasury in 2007/08
The Treasury strongly disputed the TPA's calculations last night, insisting that fuel duty should not be considered a "green" tax because it is not imposed purely to reflect the environmental impacts of fuel consumption.
Still, the TPA report is not the first to suggest that road tax revenues exceed environmental costs.
In July, an academic study commissioned by the Institute for Fiscal Studies concluded that road fuel duty is already well above the level that can be justified by the damage done by vehicles' CO2 emissions.
Ministers are also under intense pressure over a plan to raise road tax by as much as £245, a plan justified as "green" despite the Treasury having no estimate of how much carbon dioxide it will save.
A Treasury spokesperson said: "The estimate of green taxes is wrong as it includes taxes used to fund core public services, rather than simply offsetting the cost of CO2.
"For example, while fuel duty recognises the environmental costs of driving, it also pays for important public services, including new roads and public transport and efforts to tackle child poverty."
The TPA analysis also found that the gap between emissions and green tax payments "varies significantly" between suburban and rural areas and urban districts. Residents of rural areas may face much higher "excess" green taxes compared to residents of cities and towns.