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Protecting the environment

The Government believes that economic prosperity must be achieved while protecting the environment to ensure a better quality of life for current and future generations. In particular, the Government is committed to playing a leading role in tackling the global challenges of climate change. It is also committed to improving the local environment in the UK’s towns, cities and rural areas and to promoting an efficient and environmentally sustainable transport system. Budget 2007 announces:

• an increase in fuel duty rates of 2 pence per litre from 1 October 2007 and a pre-announcement of rates for the following 2 years;

• increases in car Vehicle Excise Duty rates including raising rates for the most polluting cars and reducing rates for the cleanest cars;

• from 1 October 2007 purchasers of new zero-carbon homes costing up to £500,000 will pay no stamp duty;

• measures to help householders take cost effective action to improve the energy efficiency performance of their homes;

• an increase in the standard rate of landfill tax by £8 per tonne per year from 1 April 2008;

• an inflation only increase in the Climate Change Levy from April 2008, to encourage energy efficiency in the business sector; and

• £800 million allocated to the environmental transformation fund to finance overseas development projects.