A very taxing change

15th August 2012

Related Topics

Related tags

  • Central government ,
  • Business & Industry



Peter Young, chair of the Aldersgate Group, questions the wisdom of Treasury's decision to redefine what constitutes as an environment tax

The Treasury’s revision of the definition of environmental tax seems at odds with the government’s previous commitments to grow environmental revenues and be greener than all before. It is another lost opportunity to deliver a clear message about its true intentions on both the environment and growth.

The announcement defines what green taxes do and then contradicts itself by excluding vehicle excise duty (VED) and air passenger duty, which both seem to meet the criterion of being “structured in relation to environmental objectives”.

Why else is VED scaled according to carbon emissions per kilometre?

Even though the effect is a narrowing of the environmental tax list, the promise to escalate environmental taxes is fulfilled partly by ever growing landfill tax revenues.

Given this tax has now achieved its purpose in rising to a rate that makes alternatives to landfill viable, and that it works as waste to landfill is declining sharply, this escalation also raises worries about the Treasury’s grasp of the different purpose and trajectory of environmental tax revenue streams.

If they are to encourage environmentally positive behaviour change and to succeed, taxes will not grow but deliver revenues in cycles as each goal is achieved.

The question is left whether those enormously complex models used to forecast tax-take have missed this rather fundamental point.

The best hope is that this redefinition, and fall in environmental tax-take from business, is a platform to build a robust and ambitious green tax strategy.

A strong environmental fiscal policy could deliver innovation and growth through efficiencies for our economy now and in the future.

How disappointing that no attempt has been made to articulate this, or even to ensure coherence in defining what is and is not an environmental tax.

Peter Young is chair of the Aldersgate Group and strategy director at SKM Enviros


Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.

Transform articles

Latest environmental legislation round-up

Regulatory gaps between the EU and UK are beginning to appear, warns Neil Howe in this edition’s environmental legislation round-up

4th April 2024

Read more

Dr Julie Riggs issues a call to arms to tackle a modern-day human tragedy

15th March 2024

Read more

The UK’s new biodiversity net gain (BNG) requirements could create 15,000 hectares of woodlands, heath, grasslands, and wetlands and absorb 650,000 tonnes of carbon each year.

13th March 2024

Read more

Campaign group Wild Justice has accused the UK government of trying to relax pollution rules for housebuilders “through the backdoor”.

14th February 2024

Read more

Digital tracking, packaging data delays and new collections provide a waste focus for this edition’s environmental round-up by legislation expert Neil Howe

28th November 2023

Read more

Environmental crimes could result in prison sentences of up to 10 years and company fines of 5% of turnover under a proposed EU law agreed by the European parliament and council.

21st November 2023

Read more

Stuart McLachlan and Dean Sanders discuss their book: The Adventure of Sustainable Performance: Beyond ESG Compliance to Leadership in the New Era.

14th November 2023

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close