Labour MPs attack Chancellor for 'retreating' on green taxes

Gordon Brown comes under fire today for failing to live up to his own rhetoric on environmental issues and going cool on plans to bring in "green" taxes.

In a highly critical report, the all-party Commons Environmental Audit Committee says: "We regret the fact that the Treasury has retreated from a strategic commitment to environmental tax reform, by diluting the language used in the original statement of intent [in 1997] ... Leadership is crucial, and we believe that there is much more the Treasury and the Chancellor could do to promote this agenda."

The Labour-dominated committee says few of the measures contained in Mr Brown's pre-Budget report in November are new and the Treasury's strategy of "shifting the burden" of taxation on to environmentally damaging areas has stalled.

The MPs add: "We are disappointed that the Government has not begun this Parliament with a more imaginative and creative approach to the environmental agenda to match the commitment made in 1997."

The committee expresses concern that ministers have not given their reasons for shelving plans for a pesticides tax and adopting instead industry proposals for a package of self-regulatory measures. They are also concerned that plans for the landfill tax to be increased have been delayed until 2004.

The chairman of the committee, John Horam, a Tory MP, said yesterday: "The Government's zeal for environmental tax reform appears to have fizzled out, and the dead hand of the Treasury is in danger of damping further progress."

He said it was "particularly outrageous" that the Treasury was planning to keep secret proposals by Whitehall departments for sustainable development submitted during a review of public spending to be concluded by this summer. "This will make it impossible for Parliament to hold departments properly to account," he said.

In their report, the MPs say that if the Treasury continues to insist on keeping secret the sustainable development reports submitted by departments, then it must at least agree to allow the National Audit Office to audit these reports and show the results to the committee.

The committee is "deeply perturbed" at the negative approach adopted in the environmental guidance for the spending review. "This conflicts directly with evidence given to us by the Secretary of State for Trade and Industry [Patricia Hewitt], who told us that she expected to see a lot more targets relating to sustainable development as a result of this spending review," said the report.

The MPs say the Government should also, as a matter of urgency, do research on the impact of removing the "perverse" fiscal incentive to build on greenfield sites.

The report urges ministers to give more of a lead in convincing the public to back "green" policies. "If the Government is to regain the initiative on environmental tax reform, it will need to make a convincing case for the benefits of such a strategy. Increased environmental awareness and understanding among the public will be crucial," it says.

To prevent incineration of waste becoming an alternative to using landfill sites, the Treasury should explore the scope for introducing an incinerator tax.