Secret green tax blitz planned for cars, air travel and consumer goods
By SIMON WALTERS, Mail on Sunday Last updated at 22:28pm on 28th October 2006
Photo: Driving up costs: Gordon Brown getting out of a 4x4
Secret plans for a multi-billion-pound package of stealth taxes on fuel, cars, air travel and consumer goods have been drawn up by the government to combat global warming.
The proposals, leaked to The Mail on Sunday, show that the Government is considering introducing a raft of hard-hitting 'eco-taxes' that will have a devastating effect on the cost of living.
Families with big cars could end up paying more than £1,000 a year extra in tax. And nearly every household in Britain will be hit in the pocket.
Most controversial of all, the documents reveal the Government is planning to grab billions of pounds of extra revenue from motorists - without telling them. It is considering introducing a special mechanism so that whenever oil prices go down, the Government would get the cash in extra fuel tax - not the motorist. (AtW's comment: nice one!)
A leaked letter from Environment Secretary David Miliband to Chancellor Gordon Brown says the advantage of this is that the Government would gain billions of pounds 'without individual announcements on fuel-duty rises needing to be made'.
The Government was immediately accused by the Conservatives of trying to introduce more 'stealth taxes' and failing to be honest with voters about the consequences of dealing with climate change.
The leak comes 24 hours before Tony Blair launches a major report warning that floods and other natural disasters caused by global warming will spark an economic catastrophe worse than the 1929 Wall Street Crash. But the report, by economist Sir Nicholas Stern, does not reveal what the Government plans to do about it.
But a leaked letter written from Mr Miliband to Mr Brown on October 18 and obtained by The Mail on Sunday spells out the grim reality: wide-ranging tax rises that will have a dramatic impact on family incomes.
Mr Miliband calls for tough measures to combat 'car use and ownership' with a 'substantial increase' in road tax, which currently costs a maximum of £210 a year. Mr Miliband says road tax should copy the 'success' of company-car taxes which forced people to switch to smaller vehicles with annual levies of up to £5,000.
He also suggests a 'Treasury mechanism' allowing the Government to benefit from any fall in oil prices and reintroducing the 'fuel-duty escalator', which put up the duty on petrol by five per cent over inflation until Mr Brown ordered a freeze in 1999.
Mr Miliband calls for a new 'pay-per-mile pollution tax' on motorists. And he urges VAT on air travel to EU destinations and new taxes on inefficient washing machines and light bulbs.
He also backs fresh laws to let town halls impose a 'rubbish tax' on households by using 'spies' placed in dustbins to weigh non-recyclable refuse.
The letter says: 'Differential charging for waste at household level can have a significant role to play and local authorities should be given the powers to do so.'
Mr Miliband also called for landfill tax - paid by businesses and local councils that bury rubbish - to be increased from £21 a ton to £75. But one environmental expert said this could lead to more fly-tipping unless it is properly policed.
The letter to Mr Brown, marked 'Restricted', demands urgent and radical action in next month's public-spending review and next year's Budget.
Changing people's behaviour can be achieved only by 'market forces and price signals', it says, adding: 'Market-based instruments, including taxes, need to play a substantial role. As our understandings of climate change increases, it is clear more needs to be done.'
The Government must 'increase the pace of existing tax measures, broaden them into sectors where incentives to cut carbon emissions are weak and identify new instruments to drive progress in tackling greenhouse gas'.
An aide to Mr Miliband said: "We don't comment on leaked documents. These are ideas, not a package of measures." An ally of Mr Brown added: "The Chancellor does not approve of conducting Government business on the basis of leaks."
Tory environment spokesman Peter Ainsworth said: "No one is more committed to tackling climate change than the Conservatives. But if the Government wants to deal with it successfully, it must do so in an upfront way instead of bringing in stealth taxes by the back door.
"As with everything this Government does, the devil is in the detail. If motorists and consumers think all the Government wants to do is to slap taxes on everything, they may respond negatively.
"Tony Blair's Government has sat on its hands for ten years. Tackling the enormous challenge of climate change would have been much easier if they hadn't left it so late."
Professor Julian Morris, environmental economist at Birmingham University and director of the International Policy Network, a free-market think-tank, called the new taxes "underhand" and accused the Government of "nannying".
Here we reveal the taxes proposed by Mr Miliband, Professor Morris's opinion of them - and, crucially, what they will cost taxpayers.
A couple with two children and a big car could see their annual bills increase by about £1,300 a year if the new 'green' stealth taxes go ahead. Even people with average cars could be £750 a year worse off.
The Miliband memo gives few details on the level of the new taxes. But The Mail on Sunday has compiled a budget - using cautious estimates - showing how families could be hit, based on conversations with Government insiders:
Chelsea tractor tax: Road tax disc on Toyota Landcruiser trebled from £210 to £630 and doubled from £150 to £300 for Vauxhall Zafira.
Petrol-will-never-be-cheap tax: The new Treasury plan to raise fuel tax when oil prices drop could raise pump prices by 5p a litre (22p a gallon).
A family with a gas-guzzling car who drive 15,000 miles a year would face an extra £130 annual petrol bill. A return to automatic annual fuel duty rises at five per cent above inflation could add a further 5p per litre, doubling the additional cost to £260 for a 4x4, £130 for an average car.
Pay-as-you-drive tax: New tax to make motorists pay for all environmental damage including carbon emissions, congestion, noise and damage to the ozone layer could mean a 2p-per-mile tax on all journeys for big cars, costing £300 on 15,000 annual mileage and £150 (1p a mile) for average vehicles.
Cheap flights tax: VAT at 17.5 per cent on EU airline flights would increase the typical £500 bill for family of four to fly on holiday to the Mediterranean to £587.50. An extra £5 air passenger duty each would add extra £40. Total extra: £127.50.
Light bulb tax: New levy on energy-wasting appliances could mean £50 tax on cheap washing machines, dishwashers and tumble-dryers. New £1.50 tax on old-fashioned light bulbs to halve the price gap with energy-saving ones. Total extra cost £56. (Based on an average of one new appliance a year plus four light bulbs.)
Total extra cost: A family of four with a large car would therefore pay an extra £420 in road tax, £260 in fuel duty, £300 pollution tax, £127.50 aviation tax, and £56 on washing machines and light bulbs, making a grand total of £1,163.50.
Extra revenue for the Treasury: Up to £7billion.
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Ok, so they get more taxes in order to save the environment - would they invest these taxes into R&D to replace engines that run on fossial fuelds? If they did put £7 bln a year into it then some serious results would have been achieved within a decade, if not less.
By SIMON WALTERS, Mail on Sunday Last updated at 22:28pm on 28th October 2006
Photo: Driving up costs: Gordon Brown getting out of a 4x4
Secret plans for a multi-billion-pound package of stealth taxes on fuel, cars, air travel and consumer goods have been drawn up by the government to combat global warming.
The proposals, leaked to The Mail on Sunday, show that the Government is considering introducing a raft of hard-hitting 'eco-taxes' that will have a devastating effect on the cost of living.
Families with big cars could end up paying more than £1,000 a year extra in tax. And nearly every household in Britain will be hit in the pocket.
Most controversial of all, the documents reveal the Government is planning to grab billions of pounds of extra revenue from motorists - without telling them. It is considering introducing a special mechanism so that whenever oil prices go down, the Government would get the cash in extra fuel tax - not the motorist. (AtW's comment: nice one!)
A leaked letter from Environment Secretary David Miliband to Chancellor Gordon Brown says the advantage of this is that the Government would gain billions of pounds 'without individual announcements on fuel-duty rises needing to be made'.
The Government was immediately accused by the Conservatives of trying to introduce more 'stealth taxes' and failing to be honest with voters about the consequences of dealing with climate change.
The leak comes 24 hours before Tony Blair launches a major report warning that floods and other natural disasters caused by global warming will spark an economic catastrophe worse than the 1929 Wall Street Crash. But the report, by economist Sir Nicholas Stern, does not reveal what the Government plans to do about it.
But a leaked letter written from Mr Miliband to Mr Brown on October 18 and obtained by The Mail on Sunday spells out the grim reality: wide-ranging tax rises that will have a dramatic impact on family incomes.
Mr Miliband calls for tough measures to combat 'car use and ownership' with a 'substantial increase' in road tax, which currently costs a maximum of £210 a year. Mr Miliband says road tax should copy the 'success' of company-car taxes which forced people to switch to smaller vehicles with annual levies of up to £5,000.
He also suggests a 'Treasury mechanism' allowing the Government to benefit from any fall in oil prices and reintroducing the 'fuel-duty escalator', which put up the duty on petrol by five per cent over inflation until Mr Brown ordered a freeze in 1999.
Mr Miliband calls for a new 'pay-per-mile pollution tax' on motorists. And he urges VAT on air travel to EU destinations and new taxes on inefficient washing machines and light bulbs.
He also backs fresh laws to let town halls impose a 'rubbish tax' on households by using 'spies' placed in dustbins to weigh non-recyclable refuse.
The letter says: 'Differential charging for waste at household level can have a significant role to play and local authorities should be given the powers to do so.'
Mr Miliband also called for landfill tax - paid by businesses and local councils that bury rubbish - to be increased from £21 a ton to £75. But one environmental expert said this could lead to more fly-tipping unless it is properly policed.
The letter to Mr Brown, marked 'Restricted', demands urgent and radical action in next month's public-spending review and next year's Budget.
Changing people's behaviour can be achieved only by 'market forces and price signals', it says, adding: 'Market-based instruments, including taxes, need to play a substantial role. As our understandings of climate change increases, it is clear more needs to be done.'
The Government must 'increase the pace of existing tax measures, broaden them into sectors where incentives to cut carbon emissions are weak and identify new instruments to drive progress in tackling greenhouse gas'.
An aide to Mr Miliband said: "We don't comment on leaked documents. These are ideas, not a package of measures." An ally of Mr Brown added: "The Chancellor does not approve of conducting Government business on the basis of leaks."
Tory environment spokesman Peter Ainsworth said: "No one is more committed to tackling climate change than the Conservatives. But if the Government wants to deal with it successfully, it must do so in an upfront way instead of bringing in stealth taxes by the back door.
"As with everything this Government does, the devil is in the detail. If motorists and consumers think all the Government wants to do is to slap taxes on everything, they may respond negatively.
"Tony Blair's Government has sat on its hands for ten years. Tackling the enormous challenge of climate change would have been much easier if they hadn't left it so late."
Professor Julian Morris, environmental economist at Birmingham University and director of the International Policy Network, a free-market think-tank, called the new taxes "underhand" and accused the Government of "nannying".
Here we reveal the taxes proposed by Mr Miliband, Professor Morris's opinion of them - and, crucially, what they will cost taxpayers.
A couple with two children and a big car could see their annual bills increase by about £1,300 a year if the new 'green' stealth taxes go ahead. Even people with average cars could be £750 a year worse off.
The Miliband memo gives few details on the level of the new taxes. But The Mail on Sunday has compiled a budget - using cautious estimates - showing how families could be hit, based on conversations with Government insiders:
Chelsea tractor tax: Road tax disc on Toyota Landcruiser trebled from £210 to £630 and doubled from £150 to £300 for Vauxhall Zafira.
Petrol-will-never-be-cheap tax: The new Treasury plan to raise fuel tax when oil prices drop could raise pump prices by 5p a litre (22p a gallon).
A family with a gas-guzzling car who drive 15,000 miles a year would face an extra £130 annual petrol bill. A return to automatic annual fuel duty rises at five per cent above inflation could add a further 5p per litre, doubling the additional cost to £260 for a 4x4, £130 for an average car.
Pay-as-you-drive tax: New tax to make motorists pay for all environmental damage including carbon emissions, congestion, noise and damage to the ozone layer could mean a 2p-per-mile tax on all journeys for big cars, costing £300 on 15,000 annual mileage and £150 (1p a mile) for average vehicles.
Cheap flights tax: VAT at 17.5 per cent on EU airline flights would increase the typical £500 bill for family of four to fly on holiday to the Mediterranean to £587.50. An extra £5 air passenger duty each would add extra £40. Total extra: £127.50.
Light bulb tax: New levy on energy-wasting appliances could mean £50 tax on cheap washing machines, dishwashers and tumble-dryers. New £1.50 tax on old-fashioned light bulbs to halve the price gap with energy-saving ones. Total extra cost £56. (Based on an average of one new appliance a year plus four light bulbs.)
Total extra cost: A family of four with a large car would therefore pay an extra £420 in road tax, £260 in fuel duty, £300 pollution tax, £127.50 aviation tax, and £56 on washing machines and light bulbs, making a grand total of £1,163.50.
Extra revenue for the Treasury: Up to £7billion.
------------------
Ok, so they get more taxes in order to save the environment - would they invest these taxes into R&D to replace engines that run on fossial fuelds? If they did put £7 bln a year into it then some serious results would have been achieved within a decade, if not less.
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