Businesses support green taxes, as long as they don’t have to pay

A new survey from accountants MacIntyre Hudson shows people have an extremely contradictory view of green taxes

Written by James Murray

UK workers have a contradictory view of green taxes, supporting the concept in principle but objecting to any increase in some of the most prominent green taxes, according to a new research released this week.

The survey of over 350 people, carried out by accountants MacIntyre Hudson, found widespread support for green taxes with 78 percent stating they were concerned about climate change and carbon emissions and 70 percent saying that green taxes on environmentally harmful activities would encourage greener behaviour.

However, support for the green taxation model plunged when respondents were questioned on their reactions to potential increases in specific green taxes such as Air Passenger Duty and Vehicle Excise Duty.

Six out of ten polled said there should be no further increase in Air Passenger Duty following increases earlier this year, while nearly seven out of ten said they opposed any increase in fuel duty. An increase in VAT on domestic fuel was also staunchly opposed with 86 percent stating they would not support the idea.

Furthermore, the research suggested that incremental increases in green taxes would prove largely ineffective. When questioned about a possible £10 increase in Air Passenger Duty, 95 percent of those polled said the additional charge would have no impact on the amount they flew, while a similar proportion would make no change to their driving habits in the event of a five pence per litre increase in fuel duty.

"Even if you increase green taxes by quite large amounts an awful lot of people will just carry on regardless," observed Patrick King, principal at MacIntyre Hudson.

The research found that significant increases in taxation would prompt a change in behaviour, with over 60 percent saying an £80 increase in the cost of flights would lead them to cut the number of flights they take and 43 percent deciding they would drive less in the event of a 40 pence per litre increase in fuel duty.

But King warned that such hefty hikes in taxation would prove extremely unpopular with the electorate. "You can get to a price where green taxes will work, but it would be so unpopular no government could realistically do it," he commented.

Nigel May of MacIntyre Hudson said that the results suggest that proposed increases in green taxation put forward by the Tories and Liberal Democrats could be misguided. "Unless levied at a penal level, people are unwilling to let taxation change their lifestyles," he said. "Whilst they will undoubtedly act as an adequate revenue raiser to replace Inheritance Tax, as in the latest Tory plans, the belief that green taxes are a way to reduce the country’s carbon emissions is sadly misplaced."

King added that these proposals increasingly look like a means of increasing tax revenue. "Our research suggests they will not get the reduction in demand they anticipate which means these green taxes could simply become a quick and cheap way of raising more revenue," he said.

However, the research did uncover some green tax policies that would secure widespread support. Almost two thirds of those questioned supported taxes on non-recycled refuse, while 67 percent said they would welcome increased VAT on domestic appliances and white goods that use energy inefficiently. Just over half said they would also support road pricing or wider use of congestion charging in urban areas.

"Varying VAT on white goods would twist manufacturers' arms by making producing greener goods a more profitable exercise," said Patrick King. "This is one green tax that could actually create a positive result using market forces, in contrast with the more commonly discussed green taxes which the research proves to be ineffective and hugely unpopular."

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