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The House of Commons’ environmental audit committee is calling on the government to reduce VAT on various products to help design an economy for net-zero Britain. These could include repair services and products containing reused or recycled materials and green home upgrades.
In a report, Growing back better: putting nature and net zero at the heart of the economic recovery, the committee recommends the introduction of a carbon tax to incentivise low carbon changes across the economy. In addition, it said the government should investigate the merits of carbon border adjustments to address carbon leakage.
The committee also suggested that more tax incentives should be introduced to make these low-emission vehicles more affordable. It said current environmental taxes, such as air passenger duty, are blunt in their effect, so ‘the chancellor should consider fine-tuning them to reward and incentivise investment in cleaner, more efficient, low-emission technology’.
