UK Chancellor Gordon Brown came under strong attack from political opposition parties and green groups after responding to the government’s own dire warnings on climate change with a modest £1bn package of green taxes in his pre-budget report.
Little more than a month after the prime minister described the report into climate change by the Treasury economist Sir Nicholas Stern as the most important since Labour came to power, the chancellor’s decision to double air passenger duty and to raise duty on petrol by 1.25% was derided by environmentalists and tax experts.
The £1bn tax increase amounted to less than 0.1% of GDP, compared with the 1% of GDP Sir Nicholas said would be necessary to curb carbon emissions.
Tony Juniper, director of Friends of the Earth, said: “Instead of putting measures to tackle climate change at the heart of the PBR, Mr Brown continues to tinker at the margins. The Stern review set out that urgent action is needed … But the chancellor’s response has been feeble.”
Tax experts said the changes were unlikely to alter consumer behaviour. Bill Dodwell, head of tax policy at Deloitte, said the increase in petrol duty was likely “to simply represent an additional cost for motorists, including business, rather than leading to a reduction in mileage.”
Patrick King, tax principal at MacIntyre Hudson, said: “The doubling of APD will raise substantial revenue but will do little to deter flying or help the environment.”