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Britons Face More Green Taxes, Soaring Petrol Prices

Energy Secretary Chris Huhne yesterday backed plans for an extra £22billion in green taxes – in a move which could send petrol prices soaring.

The Liberal Democrat minister backed a call by his party’s activists which would see 10 per cent of all Government revenue come from green taxes within five years.

Revenue from green taxes is currently forecast to fall from 6.9 per cent of the total to 6.5 per cent over the next five years. Raising the proportion to 10 per cent would require an extra £22billion – an unprecedented shift in the burden of taxation.

The LibDems claimed that raising more in green taxes would allow them to reduce other taxes. But critics last night dismissed it as a cynical move to squeeze more tax out of motorists.

Mr Huhne boasted that the extraordinary pledge would make the Coalition the ‘greenest government ever’. He said there was ‘commitment from the top’ to drive through the party’s costly environmental agenda and the target would put Britain ‘amongst the better performing members of the EU’ on green taxes.

Yesterday’s move goes much further than the Coalition agreement with the Conservatives which merely committed the Government to raising the proportion of revenue raised by green taxes, without setting any target.

Much of the cash would almost certainly come through increases in fuel duty. If the entire bill were pushed on to fuel duty it would push petrol prices above £1.50 a litre.

LibDem MP Martin Horwood called for those driving gas-guzzling cars to be clobbered, adding: ‘If you’re rich enough to drive one of those ludicrous vehicles you can afford to pay more.’

The LibDems gave little indication as to how the extra cash would be raised. But the party has previously backed increases in fuel duty and a radical plan to raise vehicle excise duty on gas guzzling cars to £2,000 a year.

It has also indicated support in the past for road pricing. In addition, the party supports replacing air passenger duty with a per-plane levy which would double the revenue raised.

If the entire bill was pushed onto fuel duty it would push petrol prices above £1.50 a litre

Measures will also include an increase in the controversial climate change levy which has been blamed for clobbering Britain’s heavy industries.

A party source said: ‘In the past we have been in favour of a variety of ways to deal with the issue of green taxation. Those ideas will now be taken into account in putting this into action in government.’

Supporters of green taxes claim they provide an incentive for people to stop behaviour blamed for causing climate change. But critics claim they are just another way of raising money.

Matthew Sinclair, director of the Taxpayers’ Alliance, said studies showed that green taxes were already raking in more from motorists than was needed to counter their impact on the environment.

He said: ‘Green taxes are already excessive and a heavy burden on taxpayers who need to drive to work or get away on a well deserved holiday.’

Speaking at the LibDem conference in Liverpool yesterday, Mr Huhne insisted that green taxes were popular as long as the revenue raised was used to lower other taxes.

He said green taxation was not unfair on the quarter of people in the UK who do not use aeroplanes or private cars.

The move is likely to cause alarm in Tory ranks. Transport Secretary Philip Hammond has already pledged to end Labour’s war on the motorist, and he would face accusations of betrayal if the Government imposed hefty increases in fuel duty.

Many backbench Tories are also instinctively wary of imposing new green taxes.

George Osborne, however, is sympathetic to the case for changing aviation tax to apply to flights rather than individual passengers.

Daily Mail, 21 September 2010