UK Green Budget Draws Fire

March 13, 2008

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UK Chancellor Alistair Darling’s highly anticipated “green” budget didn’t please everyone, with many feeling that it fooled at the margins of environmental problems instead of addressing the long-term issue of climate change, The Independent reports.

“Considering this was trailed as a green budget, the measures he spoke about were a massive anti-climax. The reality is that we’re falling further behind in the battle against climate change and the Chancellor fiddled while the environment overheated,” said Lisa Macpherson, national director of tax at accountants PKF, according to AccountancyAge.

In particular, Environmentalists were unhappy that an expected 2p rise in fuel duty was delayed from April until October. “Darling’s ’safe pair of hands’ has dropped the ball on climate change,” said John Sauven, executive director of Greenpeace, reported by The Guardian. “Suspending the promised increase in fuel duty has fatally undermined his boast that this is a green budget, and tinkering with tax on planes and cars isn’t going to reduce emissions when he’s also promising new runways and roads.

Darling announced a new pollution-based road tax – Vehicle Excise Duty (VED) – which promised new penalties and rewards for the dirtiest and cleanest cars. From 2009/10 the highest polluters will pay an increased VED rate of £425, and from 2010/11, the most-polluting cars would pay a first-year VED rate of £950.

Darling also said that he is reforming capital allowances for business cars to increase the incentive to move to lower emitting cars.” But Rod Tonna-Barthet, director, Siemens Financial Services, wants to see those allowances extend to other business assets, reports GreenBang.

“If the Government is to achieve its much vaunted 60 percent reduction by 2050 (which could rise to 80 percent) it has to address more than just business vehicles. Our research has shown that cost is the biggest obstacle to UK business investment in low carbon emission equipment. In widening capital allowances to all business assets – IT, telecoms, plant, machinery, etc. – not only will businesses invest, but manufacturers will be better encouraged to develop new products.”

In addition, Darling said that all new non-domestic buildings have to be zero-carbon from 2019 – a provision which is already due to apply to new housing from 2016.

Darling pointed to a potential tax on plastic bags if retailers don’t rein in use and said he would increase by 10 percent the proposed new air passenger duty.

As the Chancellor made his announcement, the Body Shop said it was ending the use of degradable plastic bags from August 2008, and switching to 100 percent recycled paper bags, The Scotsman reports.

You can see more of the environmental details of the budget here.

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