Green Stimulus package of £535m criticised as being " too small"

Government economic plans to pull the UK out of recession need to be much more "green", MPs urged.

A report from the Environmental Audit Committee said far greater investment was needed in measures such as improving the energy efficiency of housing, in order to move the UK into a low-carbon economy and meet climate change targets.

Such measures could also provide jobs and improve energy security, the select committee said.

The MPs also called for increased taxes on domestic flights to encourage more people to travel by train.

And they raised concerns about the negative environmental consequences of the wider £3 billion financial stimulus measures which include plans for road building.

A report by the committee criticised the scale of the Government's £535 million green stimulus package unveiled in the pre-Budget report as too small - especially as much of the money was not new.

It has been brought forward from 2010-2011 budget allocations and will be offset by spending cuts in future years, they said.

Instead, the MPs said the Treasury should be starting from the recent suggestion by Lord Stern that 0.8% of GDP - or £11 billion in the next year - should be spent on green stimulus measures.

The committee's chairman, Tim Yeo, said efforts to bring the UK out of recession provided an invaluable opportunity to build a sustainable economy, and there should be a "much bigger and more coherent" package of green measures in the Budget.

But he said the pre-Budget report showed the Treasury lacked the "consistency and boldness of purpose" required to drive change and tackle climate change.