MPs demand higher air and road taxes

The government should stop "running scared of critical tabloid headlines" and hike up taxes on aviation and gas-guzzling "Chelsea tractors", a cross-party committee of MPs said today.

The environment audit committee called for a new air passenger duty tax, higher VAT on the sale price of 4x4s and the return of the fuel duty escalator - scrapped by Gordon Brown after the fuel protests of 2000.

They also criticise the chancellor for his budget announcement of higher vehicle excise duty for SUVs, saying it does not go nearly far enough.

In a hard-hitting report, the committee lambasts the Department for Transport for presiding over the only sector of the UK economy to have higher carbon emissions in 2004 than the Kyoto "baseline" year of 1990 - and to still have higher projected emissions in 2020 than in 1990.

It dubs the department's attitudes "fatalistic".

Most controversially, they call for the 70mph speed limit on Britain's motorways and trunk roads to be slashed or "rigorously enforced" to bring down the amount of carbon dioxide given off by cars.

They admit this will cause "public controversy", but warn "the government does a disservice to future generations by running scared of tabloid headlines".

With emissions from air traffic doubling since 1990 and projected to quintuple as more and more Britons take advantage of cheap fares, the committee said it was time for the government to dampen demand by raising air passenger duty.

The duty could be charged per flight, rather than per passenger as at present, in order to encourage airlines to be more efficient in filling their services, the MPs proposed. And they suggested that it could also be extended to cover air freight.

The report also calls for high new taxes on domestic air travel, with the income possibly going towards a new high-speed north-south rail line.

They also criticise airports for being allowed to use low-tax "red diesel" for internal runway vehicles, which was designed to benefit farmers and hauliers.

They also want a "fundamental rethink" of the government's highly controversial airport expansion programme.

The committee welcomed the recent introduction of variable vehicle excise duty (VED), which means that the lowest-carbon cars pay no road tax, while gas-guzzling 4x4s pay an increased rate of £210.

But they said that the change did not go far enough, pointing out that progress in encouraging the purchase of zero-tax cars had been "microscopic", with numbers sold actually falling between 2004 and 2005.

And the new high rate was not high enough to deter 4x4 drivers, who still pay less road tax as a proportion of the cost of their car than motorists who opt for less-polluting diesel hatchbacks, which attract a VED of £110.

The MPs urged the transport secretary, Douglas Alexander, to look into a proposal from the Sustainable Development Commission to increase the top band of VED dramatically to £1,800, with lower bands at £300 intervals down to the least-polluting cars, which would be tax-free.

Those higher VED charges would go back into greener public transport, so as to be revenue-neutral.

Six years on from the petrol protests which brought the country to a standstill in 2000, it was time for ministers to consider a return to the fuel tax escalator, which increased the cost of petrol above inflation in order to deter road usage, said the committee.

The government should also take "much more decisive action" to shift the balance of affordability in favour of public transport to discourage higher-polluting air and car travel.

Simply asking people to drive greener cars is not enough, but must be "complemented by measures to curb the amount that people drive".

It wants lower carbon buses, and complains that many local authorities are still putting in bids for new road-building rather than tram or bus systems.

However, the report got a lukewarm reception from the government.

Transport minister Stephen Ladyman said he would not rule out "doing more" on vehicle taxes in the future, but he was not convinced raising rates would make people use more efficient cars.

"Bear in mind, of course, that people who drive gas guzzling cars are already paying for a lot of extra fuel and all that fuel carries fuel duty on it.

"So they are already incurring substantial additional costs over the more efficient cars. In many cases those costs extend to thousands of pounds and it doesn't put them off buying them."

Dr Ladyman - who himself has several speeding offences to his name - added: "I'm not entirely sure how happy the motorist would be if we tried vigorous enforcement.

"I think our policy of enforcing the speed limit for safety reasons where there is a safety concern is more cost effective than trying to get absolute enforcement everywhere for the moment."

The minister also criticised the idea of a hike in taxes for people travelling by air.

He said any attempt to tax individuals off airlines risked affecting those on lower incomes, while workers on "good wages" would still be able to afford the extra cost.

"The people who... it would affect is poorer people who wouldn't be able to take their holidays abroad any more. "