Green taxes 'under threat from Treasury', claims Greenpeace

• Influential thinktank the Green Fiscal Commission calls for fuel duties to be tripled over next 10 years• New report, The Case for Green Fiscal Reform, has backing of Lord Turner and cross-party support
Terry Macalister
guardian.co.uk, Sunday 25 October 2009 20.16 GMT
Greenpeace and other development agencies have written to the prime minister calling on him to exercise authority over the Treasury and stop it blocking vital climate change initiatives.
The call comes ahead of a report to be published tomorrow by the Green Fiscal Commission (GFC), which will call for a dramatic £150bn shake-up in the country's fiscal system – including a £3,300 tax on new cars and a tripling of fuel duties over the next decade, to be balanced by a cut in income tax and national insurance.
The non-governmental organisations claim that Alistair Darling's department is preventing a green tax being slapped on the aviation and shipping industries that would fund mitigation schemes in poorer countries, despite Gordon Brown's support.
And they fear that calls in the GFC report for a package of new green taxes on businesses and households at a time of economic difficulty will also be stopped by Whitehall mandarins.
"The Treasury has been a block on progressive action historically and the same is true today," said John Sauven, executive director at Greenpeace. "We have written a joint letter to the prime minister because it is disgraceful that the Treasury theocracy is blocking a tax on bunker fuel [shipping or aviation fuel] that he himself supports.
"We fear the same could happen here [to the GFC report]. Yet green taxes are one of the critical planks in tackling climate change as far as we are concerned, although a key thing is to ensure that we safeguard social justice," he added.
The Labour government came into power promising a shift to a policy of the "polluter pays" but Greenpeace believes it began to retreat from that position, notably after the fuel protests in August 2000 caused oil refineries to be blockaded and widespread disruption.
The Case for Green Fiscal Reform, to be launched tomorrow by Lord Turner, head of the committee on climate change and chairman of the Financial Services Authority, seeks a rise in the proportion of environmental-based taxes in the overall tax take from 7% to 15%. When Labour came to power, environmental-based taxation accounted for 9% of the tax take.
A £300 tax would be placed on new cars, increasing annually until it reaches £3,300 by 2020, while a fuel "escalator" would be introduced to increase petrol duties by 10% per annum. The report has cross-party support.
Paul Ekins, professor of energy and environment policy at University College London and author of the GFC report, said the total impact of the package would be almost exactly neutral to the economy as a whole. It would create 500,000 jobs and reward consumers who shy away from heavy CO2 consumption, but knock car and oil companies, and those who make money out of a high-carbon economy.
"Media reporting of these kinds of initiatives tends to concentrate on the losers but [the proposal from the GFC] is good news and puts money in the pocket of those who are not polluters," said Ekins.
The shadow climate change secretary, Greg Barker, said that the Conservatives would consider the report's recommendations seriously.
The transport lobby went on the attack today, with the Freight Transport Association (FTA) saying the government was already using too much stick and very little carrot with road users.
"Our members use road, rail and sea where they can but the infrastructure is not there at the moment to make [low-carbon alternatives] more viable. We met the Treasury the other week and it admitted the fuel duty was not an environmental tax but a revenue raiser," said Jo Tanner, a spokeswoman for the FTA.
The Society of Motor Manufacturers and Traders said it could not pass comment before seeing the report but was alarmed at the idea of levies on new cars at a time when the industry is in recession.