Environment: Hague rejects green tax plans

WILLIAM HAGUE today will come down against the Chancellor's plans for piling higher taxes on motorists as part of a green strategy for reducing pollution and getting more people on public transport.

The Conservative leader will warn against increasing the taxes on firms, which risk losing jobs by raising taxes on company cars.

As Gordon Brown prepares to increase the taxes on motorists in his Budget on 9 March, Mr Hague will call for environmental measures including tax breaks to be introduced as part of a low taxation strategy.

The Chancellor is expected to announce a change in the way he taxes company cars from the cost of the vehicle to penalising large cars with poor fuel efficiency. He has already announced his intention of charging owners of small engined cars pounds 50 less than the pounds 150 car tax.

Mr Hague will tell a business environment awards ceremony: "There is a fundamental problem with green taxes. They are not what businessmen call `win-win'. For if you just impose more and more green taxes, you put up costs, make Britain less competitive and destroy people's jobs and livelihoods.

"This is not what my party, or any positive blue-green agenda, should be about. I support the principle that the taxation system can be used to achieve environmental objectives, but my party and I do not and will not support environmental taxes if they are merely used as an excuse to raise the level of taxation overall."

Mr Hague is positioning the Tory Party to reap the votes of motorists and as the "motorists' friend", but it could come unstuck if the Government's wider environmental agenda proves popular. Some senior ministers believe that the public will be prepared to pay higher taxes if they are convinced it is in a good cause, such as taking traffic off roads.

Mr Hague will argue: "We should only use taxation to achieve environmental objectives as part and parcel of a low tax regime."