Sunday, September 24, 2006

Lib Dem conference- "The Green Tax Switch" and Beyond!...

The first thing i feel i should clarify is that despite booking months in advance and eagerly anticipating my 1st autumn conference, i never actually made it to Brighton (due to an annoying virus i have been suffering with), as a consequence my views on the proceedings are not based on soundings from the conference floor, just from what i have seen as one of the many avid viewers of the bbc parliament channel!

Green Tax Switch

For all the furore about the returning Kennedy and Ming's first major address to the party faithful, the big shift in tax policy was for me always set to be the seminal moment of conference. We have left Brighton with undoubtedly the most radical, redistributive and bold set of tax proposals of any of the three major parties. I am confident that with a public consensus now building on the urgent need to do more to combat climate change, the 'green tax switch' will play well with the public. I believe that people will accept that the polluter must bear a cost for his actions and higher car tax duties and airline fees are a responsible way of taxing people. I was also reassured by both Vince Cable and Chris Huhne's insistence that all the research into green taxes shows unequivocably that the welthier an individual is, the more they tend to pollute. Thus, helping to allay fears that i had originally harboured about green taxes not being as progressive as those on income. Obviously the greatest selling point of the 'tax switch' is that the estimated £8bn increase in revenue from green taxation can be used to fund tax cuts for the lowest earners in society. The fact that these proposals take 2million of the poorest Britons out of having to pay tax alltogether is an undoubted triumph and a policy that will be crucial in proving our crededtials both as the party most serious about tackling poverty and in attracting yet more disillisoned labour supporters to our cause. If presented wel, this policy could prove to be a pivotal votewinner and im sure one that i will return to in the future. For today, i wish to focus on the green tax element of tax policy and environmental policy in general...

The New Carrot and Stick Approach

Although i understand the necessity of higher green taxes in order to try and change behaviour and dissuade people from using cars and aircraft, i believe that punishing the polluter represents only a small part of what should be the agenda for the environment. Firstly, if green taxes are the 'stick', punishing people for polluting, we have yet to see any attractive 'carrots' to those innovators who are trying to create green modes of transport for the future. A classic example of the lack of incentives on offer, would be the situation with bio-diesel fuel which was introduced in my local Tescos garage over a year ago. Yes, bio-diesel pollutes only marginally less (around 5% im led to believe, but im not a scientist)than normal petrol, but nevertheless it is unquestionably better for the environment. Yet despite this, bio-diesel fuel was actually more expensive than petrol and diesel; so in order to buy a more clean fuel the consumer actually had to pay more, a complete nonsense. The government should have stepped in and placed a significant tax break on bio-diesel fuel, making it cheaper than anything else on the market. If that had happened i am sure that bio-diesel fuel could have been all over the UK by now and we would have had made some progress on clean fuel; instead bio-diesel is not available anywhere that i am aware of, because the public understandably refuse to pay more for it than regualar petrol and diesel. This is just one example of many instances in which i believe the government has a responsibility to intervene in order to promote and aid the development of new and potentially revolututionary green technologies. Some liberals of the more 'laissez faire' variety may argue that government interference in markets is inherently a negative phenomenon, but i passionately disagree. When the future of the global climate is on the agenda, i believe it is perfectly acceptable that national governments provide generous tax breaks and subsidies to those companies that are struggling to produce the green technologies of the future. Allowing the backers of bio-diesel fuel, toyota hybrid cars and many many more to beat the market forces that currently do such damage in holding them back.

'Nothing comes for free'

A further element of environmental policy that deserves closer scrutiny is the proportion of government spending that is accounted for by the department of the environment. Although we are promising to raise green taxes, i have yet to see a single party pledge to increase the environmental budget, which is surely a huge oversight. This is particularly the case from the Liberal Democrat perspective. We are passionately opposing a new generation of nuclear power plants on the grounds of cost, safety and the benefits of a renewable energy revolution. Yet, a 'renewable revolution' will most certainly not come without great cost to the treasury. At present, renewable technologies are grossly expensive and quite inefficient, so in order to see wind, tidal and solar power having a perceptable difference to British energy i expect (without knowing any official figures) that we are going to have to invest hundreds of millions into sponsoring the development of latest and best solutions. Just another problem in the complex area that is environmentalism...

I wait to see whether 'Dave', Gordon or Tony address any of these issues at their party conferences, but am doubtful to say the least! The wind is blowing the right way on combatting climate change and as usual the Lib Dems and Richard Branson (with his commitment to millions in green technology development)are out in front. My only warning is, that the biggest challenges and toughest decisons are yet to come.

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