£3,300 per car: Lord Turner unveils green tax blitz

Danny Fortson

An influential think-tank, supported by the government, will tomorrow urge £150 billion of new green taxes on businesses and households — including a £3,300 levy on new cars.
The recommendations from the Green Fiscal Commission (GFC), to be presented by Lord Turner, head of the committee on climate change — and chairman of the Financial Services Authority — could bring a drastic reshaping of the tax system to curb greenhouse gas emissions and encourage investment in low-carbon technology. Among the proposals are a tripling of fuel duty over the next decade, a household energy tax, and the hefty tax added to the price of every new car.
Greg Barker, the Tory environment spokesman, Alan Whitehead, a Labour MP on the energy select committee, and Chris Huhne, the Liberal Democrat home affairs spokesman, will speak at the launch of the 100-page report from the commission — a body of academics, industrialists and politicians set up to advise government.
The GFC, which is chaired by Robert Napier, chairman of the Met Office, argues for a “fundamental rebalancing of the tax system” based on the “polluter pays” principle.

It wants to double the proportion of green taxes in the overall tax take from the current 7%. The government’s total tax income would not rise because the hikes in green levies would be offset by cuts to income tax and National Insurance contributions.
The report sets out different models for the tax system depending on different commodity-price assumptions and required levels of investment for clean technologies and energy-efficiency measures.
The broad theme is for a raft of new “eco taxes” aimed at curtailing activities, of both individuals and businesses, that use natural resources or create pollution.
Paul Elkins, a professor at University College London and the author of the report, said: “It’s really a question of moving a mindset. We’ve had it as a given that energy is cheap, so we have been wasteful. This has to change and the only way to do that is to make the polluters pay.” Elkins said he was “hopeful” that the recommendations will be adopted by the leading political parties.
Among the most controversial proposals would be a £300 tax on new cars, increasing annually to £3,300 by 2020.
Representatives from the Tories, Liberal Democrats and Labour were closely involved in drafting the report.
The Tories have been briefing power companies on a scheme that would provide £6,500 to every household in Britain to spend on energy-efficiency measures. The sum would come in the form of a low-cost loan to energy suppliers, which would be repaid over several years via contributions through domestic energy bills.