Green taxes 'would hit poor most'
October 27, 2004
Poor families would be hardest hit by "green" taxes designed to protect the environment, research suggests.
The study found poorer households used a higher rate of natural resources such as gas, electricity and water, meaning they would face a bigger tax bill.
It said the impact could be eased by raising the rate for higher earners or by compensating poorer families.
But even then, the Policy Studies Institute found some low income households would remain worse off.
Green taxes are aimed at cutting the use of natural resources and encouraging recycling of waste.
Variable rates
The study, by the Policy Studies Institute and released by the Joseph Rowntree Foundation, focused on domestic use of energy, water and transport, as well as the amount of rubbish produced.
It looked at the impact of the introduction of flat-rate green taxes and considered what effect variable-rate taxes and compensation schemes would have on poorer households.
In all alternative programmes considered, most low income families were "substantially" better off, the report said.
The research found that:
- Changes to stamp duty and council tax to reward homes that were more energy-efficient could cut consumption by 10% and save households almost £20bn
- Water meters or a variable tariff linked to the council tax band would be a more equitable means of charging for water usage, which it said was at an unsustainable level
- If petrol taxes were increased, vehicle excise duty could be abolished for poorer drivers
- Waste collection and disposal charges could be removed from council tax and replaced with a charge based on the weight of unsorted waste.
Further information is available on the BBC News site.
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