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Friends of the Earth Budget 2002 response

Chancellor Gordon Brown has promised major new spending on the National Health Service - and put up personal taxation to pay for it. But he has missed his chance to use green tax policies to improve other public services - and particularly to find more money for our crumbling rail network.

Surrender to the fuel protestors means that the cost of motoring will continue to fall. To keep motoring costs stable, fuel duty should have been raised by 1.2p this year for petrol and 1.5p for diesel. This would have raised �405M in 2002. Friends of Earth estimates that an increase of 75% in spending on rail is needed over and above the Government's 10 year transport plan. The cost would be �26bn over the 10 year period. �11bn could be raised from fuel duty if overall motoring costs were kept at the current level, and up to �16bn from cuts in the roads programme. Cheaper motoring means more congestion, more pollution and more emissions of climate changing gases.

Welcome small measures include cuts in Vehicle Excise Duty for less polluting vehicles, although FOE called for this to be financed through increases in VED on larger vehicles; road charges for foreign hauliers; and a charge on North Sea oil profits. Tax breaks on green electricity and CHP were already planned, while potential tax breaks for new green fuels appear to depend on their future development. 100% capital allowances for new energy efficiency technologies is also a significant step in the right direction.

Commenting, Friends of the Earth Director Charles Secrett said: "Today's Budget may be good news for people who use our Health Service - but it is bad news for people who use our railways and buses - and it's not exactly a boost to those who care about our environment. There are some welcome small green measures, but surrender to the fuel lobby means that a major source of money for better public transport has simply been abandoned. "After a promising first-term start, Labour seems to have lost its nerve and be backing away from both green taxes - which can discourage environmental damage and raise money for employment and environmental protection. This is a mistake, for economic and social as well as environmental reasons."