Select Committee on Environmental Audit Fourth Report



2. This report sets out the Committee's views on the progress made by Government in shifting the burden of taxes from environmental "goods" onto environmental "bads" in line with the Statement of Intent on environmental taxation issued by the Government in 1997. It continues the Committee's annual audit of progress in this area by reporting each year on both the Pre-Budget Report and the Budget.[8]

3. The Government's Pre-Budget Report (PBR) provides a key opportunity for the Government to set out developments in its strategy for placing environmental concerns at the heart of government. The Committee commented that the 1999 Budget was the greenest ever.[9] It is vitally important that the Government should maintain the momentum in view of the challenges inherent in achieving sustainable development as set out in the revised sustainable development strategy[10]—particularly the need to reduce UK greenhouse gas emissions.

4. This year we examined in detail three areas where the Government has been considering, or planning to introduce, environmental taxes: energy consumption, pesticides use and aggregates extraction—including the consistency of approach. We also looked at other issues arising out of the 1999 Pre-Budget Report including: environmental evaluation, Government procurement, VAT on energy saving measures, and the fuel duty escalator.

5. The report includes at Appendix 1 the Government's reply to the Committee's report on the 1999 Budget statement and incorporates our comments on that.

6. The Committee took evidence from:

the Royal Society for the Protection of Birds (RSPB), the Pesticides Trust, the National Farmers Union (NFU), the British Agrochemicals Association (BAA), Water UK, and the Environment Agency—on pesticides use;

the Quarry Products Association (QPA), English Nature, the Council for the Protection of Rural England (CPRE), and the Wildlife and Countryside Link—on aggregates extraction;

the Energy Intensive Users Group (EIUG), the Confederation of British Industry (CBI), and the Emissions Trading Group (ETG)—on the Climate Change Levy; and

Mr Stephen Timms, Financial Secretary and Green Minister for the Treasury on all issues.[11]

7. The Committee is grateful for memoranda from a wide range of organisations, including environmental organisations, industry trade associations, and government bodies. Some of the areas the Committee examined have been subject to extensive government consultation recently, and a number of organisations provided the Committee with copies or extracts from consultation documents they had submitted to government.[12] In addition, we received memoranda from the Treasury on the environmental impact of the Climate Change Levy, VAT on energy saving measures, procurement issues, and on various points arising from the oral evidence Mr Timms gave to the Committee.[13]

8. The Committee also acknowledges assistance from its two specialist advisors on environmental economics, Dr Paul Ekins of Forum for the Future and Keele University and Mr Chris Hewett of the Institute for Public Policy Research.

8   The Committee's earlier reports were its First Report, The Pre-Budget Report, HC547, Session 1997-98; its Third Report, The Pre-Budget Report: Government Response and Follow-up, HC985, Session 1997-98; its Fourth Report, The Pre-Budget Report 1998, HC93, Session 1998-99; and its Eighth Report The Budget 1999: Environmental Implications, HC326, Session 1998-99 Back

9   Eighth Report, HC326, Session 1998-99, paragraph 9 Back

10   A Better Quality of Life, A strategy for sustainable development for the UK, Cm 4345, May 1999 Back

11   Ev pp 10, 36, 46, 56, 72, 90, 105, 120, 126, 135 Back

12   The witnesses and memoranda received are listed at the back of this report and all the evidence is to be published as HC76-II Back

13   Ev pp 130-135, 153  Back

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Prepared 29 February 2000