Saturday, September 02, 2006


Popular fads are hard for politicians to resist when the harm of them is not immediately apparent

Taxes on motoring, flying and other polluting activities would rise under a Conservative government, according to George Osborne, the Shadow Chancellor. He said that the Tories would raise more money from green taxes and less from taxes on employment, investment and savings. The policy is aimed at giving the Conservative Party a green image, but risks alienating both motorists and right-wingers, who want more emphasis on tax cuts. He made one of his clearest statements yet on tax on a trip to Japan, where he is studying ways of reducing pollution, including the use of super-fast trains to curb demand for internal flights. Today he will take a ride on a magnetic train capable of travelling at 360mph, which he said could virtually eliminate domestic flights if brought to Britain.

Mr Osborne and David Cameron, the Conservative leader, are touring Asia as part of their strategy to portray the party as a government in waiting, being taken seriously by foreign leaders and with a coherent range of policies. Mr Cameron will next week visit India, where he will meet business and political leaders. Speaking in Tokyo, Mr Osborne said: "I believe we in Britain should move some of the burden of taxation away from income and capital and towards taxes on environmentally-damaging behaviour. Instead of a tax system that penalises hard work and enterprise, I want to move towards more effective and fair taxes on pollution. I want the proportion of tax revenue raised by green taxes to rise." He refused to be drawn on any details of tax changes, but said they were considering fuel tax and vehicle excise duty, as well as tax on aviation, and a new carbon tax to help to tackle global warming.

Steve Norris, who leads a Conservative working group on transport, said that he was sure the party would reintroduce the fuel duty escalator, whereby the tax on petrol and diesel is automatically increased every year. The fuel duty escalator was abolished by Gordon Brown after protests by lorry drivers and farmers.

Ed Balls, the Economic Secretary to the Treasury, hit back: "I think the question George Osborne failed to answer is: is he really saying that he thinks taxes on motorists should be going up now at a time when petrol prices are so high? If you are going to be a serious Opposition you need to come along and say what are your proposals, how would you pay for them. Until then people won't take you seriously."

The Shadow Chancellor also insisted that Britain should compete with the rest of the world by developing a series of high-speed rail links with magnetically levitated trains, connecting major cities. Such "maglev" trains already operate in Japan and China, and are being tried out in Germany. "If Japan is developing this technology, if China has already introduced this kind of train, if Germany is looking at this technology, why are we not doing so in Britain?"

Mr Osborne's claims that such travel would tackle global warming by reducing demand for flights was rebuffed by Cliff Perry, of the Institution of Mechanical Engineers, who said that maglev trains produced more pollution than slower trains and were the "railway equivalent of Concorde". An aide to Gordon Brown, the Chancellor, said that the maglev network would cost tens of billions of pounds. "No party will ever be taken seriously when they throw around commitments on tax and spending like this. David Cameron and George Osborne are proving that they simply do not have the maturity and experience to address the serious issues facing Britain's future," he said.


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