Motorists and airline passengers could be targeted in Green crusade

Mar 12 2008 by Alex Turner, Liverpool Daily Post

CHANCELLOR Alistair Darling is expected to put green measures at the centre of his first Budget, with the motoring and aviation industries among his targets.

He is widely tipped to put a so-called showroom tax of up to £2,000 on 4x4s, although a planned 2p rise in fuel duty that was due to come into effect on April 1 may be delayed until the autumn as fuel prices continue to rise.

He is expected to change air passenger duty (APD) into a tax on flights in a bid to cut carbon dioxide emissions while airlines may be hit more heavily for using planes with higher emissions.

Neil Pakey, managing director of Liverpool John Lennon Airport, believes that reform of APD is crucial, and needs to be tackled in the context of the positive benefits airlines have for the region’s economy.

He said: “What we have got is a unique tax called the APD – no other country has it – which has generated billions of pounds for the Treasury. We would like it to be replaced by a proper green tax. It would cost the higher emitters more, that would encourage the industry to reduce emissions.

“Currently none of the money goes back to the environment. It doesn’t get invested into research or new technologies or anything that helps the environment. We are desperate to see some reinvestment.”

One local business adviser argues that the Government should give investors tax incentives to divert their investment cash into greener companies.

Jane Jackson, head of tax at PKF’s Liverpool office, said: “If you can invest in a green company and there is a tax benefit, that will provide an incentive to investors. A similar measure really helped AIM-listed companies.

“If there is a tax benefit, there is something real in it. This will help people to focus their minds.”

But whatever the Chancellor announces later today, he is unlikely to please environmentalists. Frank Kennedy, the Liverpool-based regional campaigns co-ordinator for Friends of the Earth, doesn’t think the Chancellor will go far enough.

He said: “We expect some shift in the direction of green taxes, but we expect him to be more cautious than we would like him to be.

“A windfall tax on utilities who have been making money on energy cost rises would be popular. We would like to see a shift from taxing employees and employers to a heftier measure on polluters and counter-balance that with incentives so that companies can behave in a more responsible fashion.”