Chancellor in tricky waters over water pollution charges

A decision in principle on whether the Government intends to proceed with any water pollution taxes or charges is expected in the March Budget. But responses to last year's consultation paper on the topic indicate that the Chancellor would be ill-advised to treat the matter as a simplistic test of his environmental credentials. Enthusiasm for charges on point sources is limited, and virtually absent for tradable permit schemes. Environmental interests are keen to see taxes imposed on pesticides and fertilisers - but the farming and agrochemical industries have raised important questions about their environmental effectiveness. One issue on which most interests agree is that at least some of the revenues from pollution charges must be used for environmental ends.

In his pre-Budget statement last November, the Chancellor announced that a consultation paper on water pollution charges was being published by the Department of the Environment, Transport and the Regions (DETR) "with a view to making proposals in the Budget." The Budget is on 17 March - but key players' responses to the consultation suggest that the Government would be misguided to proceed at full steam ahead.

The consultation paper canv

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