The Exchequer Secretary to the Treasury (Priti Patel)
Over the Parliament this Government have introduced reforms to the tax system to make it more competitive, simpler, fairer, and greener. As part of this, in May 2010 Government committed to increasing the proportion of tax revenue accounted for by environmental taxes.
In 2012, the Government published their definition of environmental taxes which set the baseline for achieving that commitment. This statement provides an annual update of the Government’s progress against that commitment, using the independent OBR forecasts published alongside the Budget.
The Government classify environmental taxes as those that meet the following three principles:
The tax is explicitly linked to the Government’s environmental objectives; and
The primary objective of the tax is to encourage environmentally positive behaviour change; and
The tax is structured in relation to environmental objectives—for example: the more polluting the behaviour, the greater the tax levied.
The Government have defined the following as environmental taxes based on these principles:
Climate change levy
Aggregates levy
Landfill tax
EU emissions trading system (EU ETS)
Carbon reduction commitment energy efficiency scheme
Carbon price floor
The OBR forecasts demonstrate that the coalition remains on track to achieve its commitment to increase the proportion of revenue accounted for by environmental taxes.
Tax | 2010-11 | 2011-12 | 2012-13 | 2013-14 | 2014-15 | 2015-16 | 2016-17 | 2017-18 | 2018-19 | 2019-20 |
|---|---|---|---|---|---|---|---|---|---|---|
Climate change levy and carbon price floor (£bn) | 0.7 | 0.7 | 0.6 | 1.1 | 1.5 | 2.0 | 2.0 | 1.9 | 1.7 | 1.5 |
Aggregates levy (£bn) | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 |
Landfill tax (£bn) | 1.1 | 1.1 | 1.1 | 1.2 | 1.1 | 1.1 | 1.0 | 1.0 | 1.0 | 1.1 |
EU ETS (£bn) | 0.4 | 0.2 | 0.3 | 0.4 | 0.3 | 0.4 | 0.4 | 0.5 | 0.6 | 0.8 |
Carbon reduction commitment (£bn) | 0.0 | 0.0 | 0.5 | 0.6 | 0.6 | 0.8 | 0.7 | 0.6 | 0.6 | 0.6 |
Total revenue from environmental taxes (£bn) | 2.5 | 2.3 | 2.7 | 3.5 | 3.9 | 4.6 | 4.5 | 4.3 | 4.3 | 4.3 |
Total current receipts forecast (£bn) | 572.5 | 593.4 | 601.4 | 624.1 | 646.9 | 667.4 | 700.9 | 731.2 | 764.5 | 804.3 |
Proportion of total tax receipts (£bn) | 0.4 | 0.4 | 0.5 | 0.6 | 0.6 | 0.7 | 0.6 | 0.6 | 0.6 | 0.5 |
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