Lib Dems promise financial reward for good environmental behaviour

12.00.00pm GMT Thu 11th Nov 2004

Environmentally friendly behaviour will be financially rewarded under new plans to link environmental and economic policy, the Liberal Democrats have announced.

Economic incentives for consumers to choose less polluting and less damaging products and services will be offset by plans to ensure polluters pay for the environmental costs of their activities.

Research by the Lib Dems reveals that environmentally damaging behaviour will cost Britain a massive £67 billion this year. Over half of that, £37bn, is the impact of road transport, whilst £5.7bn comes from domestic and commercial energy waste. Flooding is estimated to cost the British economy £1bn, a figure that could rise if action is not taken to combat global warming.

Key features of the plans to link the economy and the environment include:

• Graduating tax on cars on the basis of emissions to increase tax on more polluting cars and reward cars with low emissions.

• Replacing Air Passenger Duty with an Aircraft Departure Duty to ensure maximum use of passenger flights and to start charging for freight flights;

• Giving local authorities the powers to introduce variable waste charging, paying refunds to households that reduce the amount of waste they produce.

Commenting, Norman Baker MP, Liberal Democrat Shadow Environment Secretary, said:

"Doing nothing is not the cheap option; it is costing Britain £67 billion per year. For the sake of prudence we need a Chancellor who's green, not Brown.

"The simple message is that polluters must pay. But that doesn't mean more tax for everyone; it means a fairer tax system that will financially reward those who use environmental factors in their decision-making.

"By shifting the tax burden onto polluters, we can cut other taxes to help the poorest in society whose quality of life is already disproportionately affected by pollution."

Dr Vince Cable MP, Liberal Democrat Shadow Chancellor, added:

"The Labour Government's heavy handed use of environmental taxes to raise more revenue for the Treasury has undermined public trust.

"We are not proposing higher taxes but using existing taxes to reward environmentally friendly behaviour. The revenue from these taxes will not disappear into a bottomless pit within the Treasury but will be fed back into lower taxes elsewhere."