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23 Jun 2010 14:22
While the Budget was relatively quiet for green tax measures, the anticipation is that autumn will bring the detail for the new coalition Government's green tax policy, says PricewaterhouseCoopers LLP.
Mark Schofield, head of sustainability and climate change tax, PricewaterhouseCoopers LLP, said:
“While the Chancellor focused on deficit reduction and fairness in the tax system, there were some minor changes to existing green taxes, perhaps reflecting the Government's promised green focus and hinting at the shape of things to come.
"The Government is also considering a move from a per passenger to per plane tax levy and we welcome the decision not to rush a change, given the complexity that could create and a possible impact on the UK's competitiveness”
Confirmed in the detailed Budget was the zero emission rating for commercial vehicles and the announcement of plans to review the operation of the Climate Change Levy, in line with previously stated Conservative intentions to look at a carbon floor price.
Mark Schofield, head of sustainability and climate change tax, PricewaterhouseCoopers LLP, added:
“What was most striking from an environmental perspective about the Budget was what it did not say about environmental tax and regulation. Autumn will bring the real detail on big ticket environment tax and regulation issues, and that's when the Government's green deal for business needs to emerge if we are to meet the investment cycles needed to achieve the UK's carbon emission reduction targets. The economy was always going to take precedence now.
"Counter-intuitively, despite the level of cuts on the table currently, we will have to invest in the short-term for long-term low carbon sustainable economic growth. Environmental taxes and regulation now pervade so many areas of business. Both business and the Government need to be acutely aware of the ripple effect of spending cuts across the transport, agriculture and public sectors. Environmental programmes that appear peripheral are actually embedded in our daily lives, such as encouraging public transport use, and energy efficiency incentives.
On green tax policy and what this means for business, Mark Schofield, head of sustainability and climate change tax, PricewaterhouseCoopers LLP, concluded:
“The business appetite for government leadership on environmental regulation and tax issues is there. But as with many tax and regulation issues, the call for action is for one of simplification, clarity and long term certainty. Business really wants to engage in this agenda and help government form good policy.”
ENDS
Notes to Editors:
1. In a recent global survey, Appetite for Change, conducted by PwC, of the British companies interviewed about their attitudes towards environmental tax and regulation 94% said that they expect climate change to impact the way they conduct business in the next two to three years. The results are significantly higher than the European (87%) and global averages (84%).
2. Despite strong support (68%) for government leadership on the environmental issues, fewer than four in ten UK companies feel that government is giving sufficient priority to addressing business issues in relation to climate change. Only 18% of UK respondents felt that there is joined up thinking between the various UK government departments, bodies and agencies concerned with climate change, nearly half that of the global and European averages in the survey.
3. The ploughing back of money raised from environmental taxes and regulation directly into green or environmental projects is seen as important by 90% - but only 18% are confident this will happen.
4. Over three quarters currently pay landfill tax, with over half seeing it as effective in changing their organisation’s behaviour. Views on the effectiveness of a range of UK-specific environmental levies were mixed.
5. Almost two thirds pay a climate change levy, for which the discount rate was confirmed in the budget as reducing from 80% to 65% in April 2011. The levy will also increase in line with inflation from that point. While 64% of respondents in the survey were supportive of a carbon tax or levy, 50% of companies saw the levy as effective.
6. The survey for Appetite for Change: Global business perspectives on tax and regulation for a low carbon economy, comprised almost 700 interviews worldwide, covering 15 countries; US EU (UK, France, Germany, Netherlands, Spain, Sweden and Czech Republic), China, Canada, Russia, Brazil, South Africa and Australia. The sample was drawn from the top companies in each territory by turnover, with a particular focus on industries likely to be most affected by existing environmental policy and legislation. A copy of Appetite for Change can be found at www.pwc.com/appetiteforchange
3. 50 national and multi-national companies took part in the survey in the UK, a third with over 1000 staff.
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