Miliband draws up green tax plan

Mr Miliband sent his plan to the chancellor, says the paper

Environment Secretary David Miliband has confirmed the government is holding discussions on tackling climate change using green taxes.

But he would not comment on the accuracy of a leaked letter, which suggested plans for "pay-as-you-drive" taxes and taxes on cheap flights.

He said the motive was to "get to grips with this global climate challenge".

Meanwhile Conservative leader David Cameron has told the BBC he would be prepared to tax air travel.

Liberal Democrat leader Sir Menzies Campbell said "hard choices" had to be made to combat climate change.

The comments came ahead of a report by economist Nicholas Stern, published on Monday, warning that climate change may cut global annual economic output by up to 20%.

Have Your Say Another tax from the Labour government - well there's a surprise. Steve Atty, Cheltenham Send us your comments

Mr Miliband told the BBC that it would be "measures, not targets" that would ultimately make the difference in the drive for change.

"And it's the measures around which we have to build a national consensus and an international consensus to make this change that is ever more vital, " he said.

The Mail on Sunday quoted a leaked letter from Mr Miliband to Chancellor Gordon Brown from 18 October, which it says calls for urgent action in next month's public spending review and next year's Budget.

In the letter, Mr Miliband calls for measures to combat "car use and ownership", and a "substantial increase" in road tax, the paper reported.

He also calls for a new pay-per-mile pollution tax, it said.

The paper said proposals suggest families with big cars could end up paying more than £1,000 a year in additional tax.

'Not for revenue'

Changing people's behaviour is only achieved by "market forces and price signals", Mr Miliband wrote.

He added: "As our understanding of climate change increases, it is clear more needs to be done."

The minister also suggests making flights subject to VAT, for either domestic flights or "better still all EU flights," the Mail said.

Mr Miliband told the BBC that taxes being considered by the government were not intended as a revenue-raising exercise.

Higher emission vehicles could face higher road tax

"We are using mechanisms available to government, whether they be regulatory or taxation, to change behaviour," he said.

"They're not fundamentally there to raise revenue."

Mr Miliband said Sir Nicholas's report was a "very sobering message" but also one that offered encouragement.

"The sooner you start on this process, the less drastic does the action have to be," he said.

"Sir Nicholas Stern does deliver a strong message that we have to change our behaviour nationally and internationally.

"But there's a second half of his message, and that is that the technology does exist, the financing - public and private - does exist, and the international mechanisms also exist to get to grips with this problem.

"So I don't believe it's a catastrophist message that he puts forward. It's a challenging message, which politicians need to respond to."

Sir Menzies told BBC One's Sunday AM programme: "We have absolutely no option but to deal with the problem of climate change and nothing but hard choices will do it."

Meanwhile Mr Cameron spoke about green levies in an interview for BBC One's The Politics Show.

No 10 turbine

He said: "Some green taxes do hit the poorest in our society, so we have to think about that very carefully before we make taxation decisions.

"If it means putting a tax on air travel, then yes, that's something we'd be prepared to do."

But he said budgetary decisions should be made closer to budgetary times.

"We'll come up with those ideas closer to a general election - but green taxes will go up."

Mr Cameron also gave his backing to Liberal Democrat-controlled Richmond council's plans to charge the drivers of the most polluting vehicles higher parking fees.

He also said he would put a wind turbine and solar panels on top of Number 10 Downing Street if he became prime minister.

The Stern Review examined economic, not environmental, arguments of global warming.

Sir Nicholas's report says that at the very best the cost of tackling global warming would be 1% of annual economic output.