MPS have accused ministers of undermining confidence in green taxes with a controversial levy on flying.
The Commons environmental audit committee said the Treasury had undermined public trust by appearing to use green taxes as revenue-raising tools rather than a serious attempt to change environmentally-damaging behaviour.
It adds that proposed changes to Air Passenger Duty (APD) would do nothing to reduce emissions or make it a more effective environmental tax.
It also urged the Government to clear up confusion as to whether APD was an environmental tax, saying it appeared to no longer consider the duty to be, despite including the levy under an “environmental tax” heading in this year’s Budget. The publication of the report comes as The Journal’s A Tax Too Far has highlighted the risk that APD poses to regional airports and economies by imposing damaging charges on passengers.
Relying on a European Union emissions trading system to reduce aviation emissions was a “high risk and low impact strategy”, claimed the committee – with success dependent on whether the scheme curbed emissions more generally.
MPs also said the coalition’s up-coming “sustainable aviation framework” must clearly set out how it will balance competing objectives for aviation, including the role of APD and the emissions trading system in terms of environmental goals.
The Chancellor’s decision to cut a penny off fuel duty also came under fire, with MPs saying the failure to provide any new incentives to switch to lower carbon alternatives sent the wrong signals.
They want the Treasury to adopt a coherent strategy for environmental taxation, setting out its objectives and rationale, the basis on which rates are set, and how their impact will be evaluated.
