The Treasury has been slammed by Parliament’s green watchdog for giving green taxes a bad name.In a report published today, the Environmental Audit Committee (EAC)claims that people see green taxes as a way to pocket more taxpayers’ cash rather than an incentive to cut carbon.

Joan Walley MP, Chair of the EAC said: “Green taxes shouldn’t be seen as some kind of add-on or used as a revenue raising trick – they should form an integral part of the Government’s plans to revive the economy.

“The Treasury should start to rebuild trust in environmental taxes by ring-fencing some of the revenues raised from fuel duty to cut soaring train and bus fares.”

MPs also believe that cutting a penny off Fuel Duty in the last Budget while providing no new incentives to switch to lower carbon alternatives sends the wrong signals.

A Treasury spokesperson said the Government welcomed the Committee’s report and would respond to its recommendations in due course.

They added: “As stated by the Chancellor at Budget, environmental tax policy is being developed in a way that takes account of all possible levers so that carbon reduction is done in the most effective way and takes account of wider priorities such as sustainable growth and sound public finances.”