MPs slam Treasury’s defence of its green taxes

MPs will today accuse the Treasury of failing to address concerns that the government is "giving green taxes a bad name", after the department took seven months to respond to a report calling for greater clarity on environmental levies.

The Commons Environmental Audit Committee (EAC) will today publish the government's response to a report it launched in July last year, accusing the Treasury of focusing its fiscal policy on raising revenues rather than curbing environmentally damaging behaviour.

The Treasury's response questions the committee's assertion that fuel and air passenger duty are 'environmental taxes' and defends its plan to change the way it subsidises fuel made from used cooking oil.

But Joan Walley, chair of the EAC, said the response was too little too late because it failed to address key recommendations that call for a definition of the term 'environmental taxes' and the development of a green taxation strategy.

"The government has taken nearly seven months to respond to our report, which is an unacceptable delay," she said.

"It is also unacceptable, after such a long interval, to provide an incomplete response that does not address our pivotal recommendation for clarity about what constitutes an 'environmental tax' and the need for an environmental taxation strategy."

She added that the incomplete response would do little to boost public confidence in the government's green taxes, and maintained that an environmental taxation strategy would give clarity to businesses about what constitutes an environmental tax and how it is expected to help improve the environment.

A Treasury spokesperson told BusinessGreen that it was in the process of developing a definition of green taxes.

"As the Economic Secretary made clear to the Committee [last] week, the Government continues to work on a definition of environmental taxes," she said.

"The Government remains committed to increasing the proportion of tax revenue accounted for by environmental taxes."

The EAC said it will raise any unresolved issues in its report on the Budget 2012 later this year.