APPENDIX 8
Memorandum from the Environment Agency
SUMMARY
As we said in our memorandum of evidence for
the PBR of 2002, we warmly welcome the Treasury's continuing development
of its environmental tax strategy and its keen engagement with
stakeholders. This has the potential to give environmental taxation
the momentum that it needs, at a high enough level, to help achieve
better environmental outcomes more effectively and efficiently.
We are concerned to see faster progress with proposed measures.
The Treasury should be encouraged to set out a systematic plan
of action for developing green taxation, based on substantial
analysis and consultation.
Environmental tax measures need to be based
on good analysis and need to:
— Identify the likely responses to
tax proposals by firms and individuals, seeking to ensure that
"winners" are supportive and issues for "losers"
are dealt with by practical measures.
— Co-ordinate ways in which taxation
and other economic instruments operate as one element in packages
of measures to address complex social and environmental issues.
— Focus on ways in which environmental
policy instruments can be refined over time in light of experience
gained on their application.
The Environment Agency can contribute our practical
experience to these analyses.
SPECIFIC PROPOSALS
IN PBR 2003
We broadly welcome the specific proposals in
the PBR 2003. In particular, we welcome the proposals to recycle
landfill tax revenues through a broad package of measures, which
should be pursued to secure environmental benefits and promote
appropriate efficient and innovative solutions.
However, there are gaps in the measures being
proposed. The review of Aviation did not take this opportunity
to seek measures to account for the significant environmental
costs of aviation, so that the recent developments in aviation
policy could be made more sustainable.
We welcome the announcement to consult in early
2004 on tackling diffuse water pollution, including a consideration
of economic instruments. There needs to be a positive and clear
assessment of economic instruments as part of an integrated package
of the measures needed to tackle diffuse water pollution.
ENVIRONMENTAL APPRAISAL
OF PBR
We welcome the Treasury's preparation and presentation
of the environmental appraisal tables, which are helpful. They
highlight the need for effective taxes and economic instruments
for protecting the countryside and natural resources, including,
in particular, water quality and water resources.
These tables should be more quantified in future
to clearly show the range of environmental impacts. The analysis
that should underlie any tax proposals will be able to provide
the quantitative data needed.
HOUSING SUPPLY
The Treasury published the interim Barker report
on the review of housing supply and the Miles report on the review
of the mortgage market alongside the PBR. We recognise the need
to reduce the volatility and increases in house prices and improve
the operation of the housing market.
There must be careful consideration of the significant
environmental implications of housing development. In particular,
this must address effects on natural habitats, demands for water
and implications for the consumption of energy and the generation
of wastes and water pollution.
January 2004
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