Green taxes could cripple firms
August 13, 2004
Green taxes should be rethought for fear of inhibiting the UK's competitiveness, says the Confederation of British Industry (CBI).
The employers' organisation was responding to the findings of a Government select committee report, which found that businesses were losing out under heavy taxation, but had "underplayed" competitiveness issues, said the CBI.
It congratulated the committee for endorsing CBI calls for better appraisal of green taxes and for more consistent fiscal signals to business about where to invest. It also claimed that the Treasury was starting to "recognise these issues".
Michael Roberts, CBI director of business environment, said: "The call for higher taxes on fuel fails to recognise that the UK has the highest level of duty on diesel in the EU. This has a real impact on business when moving freight by road.
"Road user charges may be years away for most drivers but that is not the case for hauliers who will pay them from 2007. This approach has greater merit than the blunt instrument of fuel duties."
The report said that environmental tax revenue has fallen as a share of the total tax turnover. But the CBI pointed out that business environment taxes have risen in recent years in line with the growth in the total tax take from business.
"We recognise that taxes can play an important role in delivering Government environmental objectives. But calls for their increased use need to take account of their impact on businesses which are also affected by other Government policies," added Roberts.
Nearly £1 in every £8 of tax raised from business comes from environmental taxes. Firms not only pay road and fuel duties, but unlike people they are also liable for taxes on energy, aggregates and waste.
This story was first published on the Business Europe website.
Print this page