Source · Select Committees · Public Accounts Committee
Recommendation 4
4
Tax impact assessments do not sufficiently recognise the potential for every tax measure to affect...
Conclusion
Tax impact assessments do not sufficiently recognise the potential for every tax measure to affect progress towards environmental objectives. The exchequer departments’ current definition of environmental taxes covers just four taxes with specific environmental objectives. Other established tax measures can have significant environmental impacts, such as fuel duty and Air Passenger Duty which both increase the cost of polluting forms of travel. Tax changes announced in Budget 2021 may also impact on the environment significantly. The new temporary 130% super deduction on Corporation Tax, worth £25 billion, could encourage investment which harms the environment as there are no environmental restrictions on eligible companies. The exchequer departments rarely quantify in tax information and impact notes the environmental impact they expect from tax changes intended to alter behaviour. This prevents effective scrutiny of the environmental impact when Parliament considers tax changes. Recommendation: From the next budget, HM Treasury should: • assess the environmental impact of every tax change considered; and • publish the expected environmental impact for each tax measure in the budget, including the extent of behavioural change, alongside forecasts for tax receipts.
Government Response
Acknowledged
HM Government
Acknowledged
agree with the conclusion that a centrally directed system was chosen because of a lack of confidence in local authorities. Councils are crucial partners in delivery of shielding support to clinically extremely vulnerable individuals and since July 2020, councils and supermarkets have been supporting access to food. The shielding framework (co-designed with councils) includes a clear set of expectations regarding delivery of shielding support. From the autumn, the government provided councils with funding at a rate of £14.60 per CEV individual per four weeks whilst Shielding guidance was in place. 4.3 Outcomes data from councils in the most recent period of shielding demonstrated good performance in triaging and meeting requests for support from CEV individuals (including those added in February 2021 as a result of the QCovid® coronavirus risk prediction model). Councils’ confidence in their ability to meet requests for support consistently remained high. The Ministry of Housing, Communities and Local Government (MHCLG) also tracked spend patterns, which will inform future review of funding. 4.4 Shielding was paused on 1 April 2021. As part of contingency planning, Ministry of Housing, Communities and Local Government (MHCLG) has tested future delivery confidence with nearly all upper tier councils across England, finding that councils are confident in their ability to stand up shielding support rapidly in future. MHCLG continues to work closely with councils and to keep funding under review so councils can support those who need it, whilst providing value for money.