Lib Dems launch green tax policies

The Liberal Democrats have launched a green taxation paper, The Green Switch, aimed at curbing carbon emissions and halting global warming. The main policies unveiled include:

Increase green taxes as a share of national income. Green taxes have fallen from 3.6 per cent of GDP in 2000 to just 3 per cent of GDP. The revenue would be used to cut taxes elsewhere as this is a green tax switch, not a rise in taxes.

Raising Vehicle Excise Duty on the most polluting new cars to £2,000. The Chancellor has increased Vehicle Excise Duty on high polluting vehicles by less than half the cost of a tank of fuel. If it is to be effective as a measure to reduce emissions and encourage greener transport, VED will have to be radically redrawn to penalise emissions and reward clean cars.

Raising Fuel Duty in line with inflation. Duty on fuel should keep track with inflation. The freeze since 1999 has led to a rise in emissions.

Abolishing Air Passenger Duty, which taxes each passenger, and instead tax each plane that takes off on its emissions. This would reward full flights and penalise half-empty ones.

Restructuring the Climate Change Levy as a tax on carbon across the economy, so that the true cost of our impact on the environment is reflected in the prices we pay.

Tighten allocations in the EU Emissions Trading Scheme, and auction 10 per cent of the permits. The recent fall in the price of carbon for industrial users reflects the unambitious overall cap set by the EU. We will press for both reforms and for auctioning the maximum 10 per cent of permits currently allowed for 2011.

Provide help where cars are essential such as sparsely populated rural areas that lack of public transport. We proposed introducing a 50 per cent discount on all but the top rate of VED for one car registered in such rural households.

Commenting, Liberal Democrat Shadow Environment Secretary, Chris Huhne MP said:

"We want fairer and greener taxes, but not higher taxes. Green taxes can change our behaviour and safeguard our planet for our children in a way that hugging a husky cannot. This is about using taxes in a new way to change behaviour, not to raise money for the Government.

"Tory hot air will not cool the climate, while Labour is missing targets and ducking decisions. The green switch is about shifting taxes from good things, such as work, onto bad things, such as gas-guzzling cars and half-full flights that cause wasteful carbon emissions."