Call for ‘fairer’ green tax system

Call for ‘fairer’ green tax system


Hepreet Kaur Grewal




Green taxes are hitting low-income families harder than other social groups, says a new report which calls for reform of the environmental tax collection system.


The impact of environmental taxes on poor families can be substantially reduced through carefully designed schemes, the research suggested.


The findings, from the Joseph Rowntree Foundation (JRF), showed that consumption of energy, water and waste disposal services in low-earning households was disproportionately high in relation to income. The same was true of petrol or diesel for those who owned cars.


Many families already experience ‘fuel poverty’ – where they need to spend more than 10% of their income on keeping warm. But new proposals from the JRF could help reduce household costs including energy consumption by 10%, saving households £19.7bn.


The report said that most of the disproportionate costs could be removed by giving green taxes a structure that increased the tariff or charge for those most able to pay – or by making compensation available for low-income households through state benefits.


It also proposed removing waste collection and disposal charges from council tax and replacing them with a charge based on the weight of unsorted waste collected from homes, which would reduce waste production and possibly make the majority of low-income households better off.


However, the report warned that use of environmental resources varied widely within income groups. This means that even if most low-income households were to be protected by charging or compensation schemes, a minority would still end up as net ‘losers’.


Professor Ekins, the co-author of the report, said: ‘The results from this research can help policy makers ensure that, if environmental taxes and charges are introduced, they are designed in ways that prevent unintended consequences for people who live on low incomes.’


Bharti Patel, a former director of the Low Pay Unit, welcomed the proposals: ‘The government needs to take this research seriously.


‘It has always argued for economic prosperity and social justice to go hand in hand, and it’s time for environmental sustainability to be a part of the equation too, because anti-poverty policies and environmental policies are linked.’


Source: the Guardian