Brown’s pre-Budget report ‘grossly inadequate’

The chancellor’s pre-Budget report (PBR) was “grossly inadequate” and failed to respond adequately to “increasing risks of major and irreversible impacts from climate change”, a cross-party group of MPs has claimed.

The commons all party environmental audit committee published its harsh critique of the PBR’s “lack of boldness” ahead of the Budget on Wednesday, in which Gordon Brown is expected to stress his green credentials.

Chair of the committee Tim Yeo MP said: “Coming in the wake of the Stern Review, the PBR’s lack of boldness raises major doubts as to the Treasury’s seriousness about implementing Stern’s recommendations on domestic policy.

“If there is one key conclusion to be drawn from the Stern Review, it is that we today are living at an important moment: we still have a limited window of opportunity to prevent greenhouse gases growing to dangerous levels.

“The government can rightly point to a number of activities which fall within the main areas recommended by Stern. What is required now is for the government seriously to increase the scale and speed of its policies, to begin to achieve the kind of steep cuts in emissions Stern demonstrates are necessary.”

The committee has reviewed every PBR since 1997, charged with examining whether the Treasury places the environment at the heart of its fiscal policies.

Mr Brown’s latest PBR marks an “ongoing retreat from the Treasury’s announcement in 1997 of a policy to shift the burden of taxation towards taxing environmentally damaging activities,” the committee notes. The proportion of taxes that could be classed as green taxes is now less than anytime since 1994.

Referencing the Stern report, the committee warns the key to stabilising emissions is not just cutting carbon emissions but the speed in which we do so.

Current targets to reduce emissions by 60 per cent by 2050 risk missing the global targets recommended in the Stern review, it notes. Instead the UK needs to consider an 80 per cent cut.

The committee is also highly critical of the chancellor’s approach to the aviation industry, warning air passenger duty does not go far enough. The Treasury should consider levying tax against flights not passengers, it argues, adding this would target empty flights and cargo planes.

It is also recommends vehicles excise duty is reformed to penalise the most polluting vehicles, calling for band G to be made “considerably” more expensive.

Reports today suggested the chancellor does intend to increase the top rate of car tax to around £400 when he announces the Budget this Wednesday.

The Liberal Democrats argued today’s report shows Mr Brown has failed to take the initiative on the environment.

Environment spokesman Chris Huhne said: “Green taxes have been falling steadily as a percentage of our national income, meaning the government has failed to use a key lever to tackle climate change.

“When the chancellor has modestly raised green taxes he has given them a bad name by failing to guarantee that the revenue will be handed back in tax cuts elsewhere.”

Mr Huhne called on the chancellor not to miss an environmental opportunity when he delivers his 11th and likely final Budget this Wednesday.