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Last Updated: Wednesday, 6 December 2006, 15:19 GMT
Brown to double taxes on flights
BA flight into Heathrow
Environmentalists say the air passenger duty is not high enough
Taxes on flights from the UK will double, Chancellor Gordon Brown has announced, in most cases a rise to 10.

But long-haul flights beyond the European Economic Area will see taxes increase to as much as 80.

Meanwhile the duty on petrol will rise by 1.25p per litre, in line with inflation, although Mr Brown did lower taxes for biodiesel.

Environmentalists had called for more drastic moves, saying only higher taxes would help to tackle climate change.

Aside from vehicles - which represent 25% of all emissions - the report looked at homes, with a bold new plan stating that most new built homes would be "zero emissions" within a decade.

The sale of such homes will be exempt from stamp duty, he said.

The increase in fuel duty will be effective from midnight tonight, while the higher taxes for air fares will not come into effect before 1 February 2007.

'Blunt instrument'

In his pre-Budget speech Mr Brown said the vast majority of flights would see Air Passenger Duty (APD) go up from 5 to 10.

Green taxes have to change behaviour... persuade people to use less energy and, in that sense, if it isn't hurting, it isn't working
Andrew Smith, KPMG

But only the report's fine print spelled out that long haul flights and people not travelling on the cheapest fares would be hit much harder.

For those travelling within the European Economic Area (EEA) not in economy class, the new duty rate will rise to 20 from 10.

Meanwhile taxes on long haul flights could rise between 40 and 80.

EEA members are all 25 EU member states, plus Iceland, Liechtenstein and Norway.

The transport sector accounts for 30% of all carbon emissions, and within this aviation makes up a fifth, said Mr Brown.

According to a recent Oxford University report aircraft produce about 5.5% of UK emissions.

But without new policies, they will account for about a quarter of the national total in 2050.

British Airways said that "Air Passenger Duty is an extremely blunt instrument".

"Further taxing hard-working families and British businesses is not the way to address climate change," the airline argued.

The chancellor said the extra money raised through Air Passenger Duty would be used to improve public transport.

Carbon markets

Mr Brown also said global carbon markets were a key to tackling emissions and said the UK was working on new carbon technology and carbon capture schemes.

"The aim is to make London the leading centre of carbon trading," said Mr Brown.

To emphasise the need to tackle global warming on an international basis, Mr Brown highlighted a number of partnerships with other countries to develop alternative energy sources and clean up energy generation.

The UK would work with Norway on a carbon capture scheme to store carbon under the North Sea, Mr Brown said.

The UK has also been cooperating with South Africa, Brazil and Mozambique on biodiesel research and looking into clean coal research with China.

Piecemeal?

While there has been much talk of a "green" budget, in practice the announcements are not radical and many will say they do not go far enough.

Gordon Brown's timid measures to reduce the environmental impact of aviation cannot be reconciled with his rhetorical stand on global poverty
Benedict Southworth, World Development Movement

Andrew Smith, chief economist at accountants KPMG, said the "idea of green taxes is to change behaviour, essentially to persuade people to use less energy and, in that sense, if it isn't hurting, it isn't working".

But he warned that green taxes tended to hit the poor more than the rich, and that revenue from green taxes should not be added to government revenue.

Instead they "should either be returned through tax reductions elsewhere or reinvested in anti-pollution measures such as encouragement of the development of the biofuels market as announced today," Mr Smith said.

Furthermore, some of the green schemes announced by the chancellor, such as that with Norway, have been fiercely criticised by environmental groups. They say burying carbon, rather than dealing with emissions at source, is not the solution.

"The reality is that nothing that the chancellor announced today will stop a massive increase in aviation greenhouse gas emissions," said Benedict Southworth of the World Development Movement.

"Gordon Brown's timid measures to reduce the environmental impact of aviation cannot be reconciled with his rhetorical stand on global poverty," he added.

Andrew Pendleton, climate change analyst at Christian Aid, said the "government's approach is horrifyingly piecemeal in the face of the greatest global threat of the modern age - climate change - which could wipe out the past 50 years of human development".




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