APPENDIX 7
Memorandum from the Royal Society for
the Protection of Birds
1. The RSPB works for the conservation of
wild birds and their environment. We are Europe's largest wildlife
conservation charity with over one million members. The RSPB was
involved in the HM Treasury's consultations during 2002 that developed
the "Tax and Environment" document.
2. The Chancellor used the Pre-Budget Report
to affirm his commitment to using the tax system to protect the
environment. The RSPB welcomes his leadership on this issue. We
consider that the Treasury's Environmental Tax and Spending Strategy
should send clear signals that the Government is committed to
using taxes to make the polluter pay for costs to health and the
environment. This can help the United Kingdom to gain competitive
advantage in the technologies of the future.
3. The RSPB believes that green taxes can
address market failure, (incorporating externality costs, inadequate
property rights and information lapses), to achieve environmental
goals at lowest cost and highest efficiency, particularly over
the longer term. We are pleased that Defra's Biodiveristy Strategy
for England supports the principle of ecological tax reform and
measures that will "give the right market signals".
4. The RSPB welcomes the government's commitment
to lengthy consultation with stakeholders before and during implementation
of green taxes and other environmental policies, particularly
with respect to revenue substitution and direction. We believe
there needs to be more recognition that environmental issues may
have to be viewed in a wider context than that provided by short-term
cost-benefit analysis.
5. AVIATION TAXES
5.1 The RSPB is concerned that the economic
and social benefits of aviation are offset by adverse environmental
impacts, chiefly because airports and related infrastructure destroy
valuable natural habitats and because aircraft noise and chemical
emissions damage local and global environments. The air travel
market is not mature and demand remains highly responsive to price
and other signals. Forecasts of market growth are vulnerable to
wide variation, according to the assumptions made about economic
growth, interest rates and other market factors. Accordingly,
there is scope for unambiguous price or other policy signals,
delivered in order to "internalise" environmental impact
losses, to have a significant effect on final demand.
5.2 Unlike other transport sectors, aviation
is relatively free of tax: aviation fuel is duty free, air travel
does not attract sales/VAT taxes and airport dues are low. Aviation,
therefore, has advantages that other sectors do not have, which
may bias resource allocation in its favour. The RSPB believes
economic instruments that change the relative cost of air transport
with respect to other transport systems and other goods and services
could be effective in providing a more sustainable growth path
for the industry: one that addresses issues of sustainability
by managing demand growth and providing incentives to limit environmental
damage. The Pre-Budget report made no move in this direction.
6. AGRICULTURAL
TAXES
6.1 DEFRA's "Strategy for Sustainable
Food and Farming" (December 2002) lacks any hard tools through
which to deliver its objectives. The strategy casts a nod in the
direction of the polluter pays principle, but the strategy's only
mention of economic instruments is to "consult next year
on possible policy measures (to control diffuse water pollution)".
The plan fails to set out ways to get the industry up to the right
standards and keep it there. Economic instruments must play an
integral role if this strategy is to be achieved.
6.2 The role of economic instruments in
agriculture has been limited in the past, mainly to the provision
of incentives for agri-environment schemes. The time has come
for taxation or regulations to be used on major environmental
problems such as diffuse pollution, especially where they are
the most effective options in problem catchments. The RSPB would
like to see the Government build on existing initiatives to develop
a comprehensive strategy to reduce the environmental impacts of
pesticides and diffuse agricultural pollution, including exploring
voluntary, regulatory, fiscal and reward-based instruments.
7. LANDFILL TAX
AND BIODIVERSITY
FUNDING
7.1 Direct funding of nature conservation
is one of the essential ways through which wildlife is protected
in the United Kingdom. Current funding levels are insufficient
to deliver the UK Government's nature conservation obligation.
7.2 The RSPB has concerns over policy changes
to the Landfill Tax Credit Scheme proposed in the Pre-Budget Report:
— Capping the monies in the "community"
aspect of the Scheme at 2002 levels will inevitably result in
a net loss of funding for community environmental and conservation
projects over time.
— A revised community environmental
project Scheme should remain private, to allow match funding of
public funds.
The ending of present Landfill Tax Credit Scheme
arrangements from April 2003 leaves great uncertainty over the
future of valuable long-term projects dependent upon Landfill
Tax Credit Scheme funding that run beyond that time.
7.3 Moreover, small shifts in Government
policies, for example on the Landfill Tax Credit Scheme, Aggregates
Tax and Heritage Lottery Fund, can have significant consequences
for biodiversity funding. The RSPB urges the Government to ensure
a sustainable financial regime for biodiversity delivery in the
UK when altering these policies.
January 2003
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