Taxing the naughty or luxurious and rewarding virtuous things, such as work and saving, has been a goal of economists and of populist politicians for centuries. They have failed. Half the Exchequer’s total revenue now comes directly from taxes on work and saving, excluding company tax. This compares with a peak of more than 60 per cent in 1978-79 and 41 per cent even back in 1913, and is only marginally higher than the average since national insurance started. Yet taxing the bad and rewarding the good is now the declared fiscal policy of all three of the UK’s Establishment political parties.

The first part of this policy is no problem. It has been a stock in trade of the self-righteous for centuries. Excise duties were first levied by the Puritan-led Long Parliament in the 1640s and focused from the start on alcohol. Duties on strong drink have been successful at raising revenue over the centuries. They will raise £8 billion this year, the same as duties on tobacco.

This success tells a story. These duties are productive because they have failed to deter us from drinking and smoking. From time to time, drinks taxes lead us to favour one tipple or another, but drunkenness is still rife. For the same reason, road fuel, the nation’s only big “green” tax, raises an indispensable £25 billion a year.

Bear this in mind when party leaders promise that “green” levies will be tax neutral and other taxes will therefore be cut pro rata. If these promises are to be met, it is essential that tax rates be graduated as carefully as the Government’s air passenger duty, so as to have no great effect on our behaviour.

Deterrent imposts, such as the former duty on newspapers, raise little revenue. If green taxes make a big impact on carbon emissions, let alone global warming, there can be no compensating cuts in other taxes. If such activities already yield tax, other taxes would have to rise.

A combined £16 billion from alcohol and tobacco duties is far too much for a Chancellor to do without. If we all went teetotal and stopped smoking, income tax would have to rise by five pence in the pound or VAT go up from 17.5 per cent to about 21.5 per cent.

The case for air passenger duty is that aviation is relatively lightly taxed and also relatively insensitive to price increases. So the levy could raise lots of money. To pretend it has much environmental, let alone moral, purpose is cant. This “green” tax is accepted because air travel is deemed to be conspicuous consumption by the affluent. On the same basis, the Treasury levied a duty on rail passengers until 1929, when impending bankruptcy suggested that railways were no longer the preserve of toffs. If carbon emissions were the test, rail passenger duty would return.

Similar tax fads have led to many sin or luxury taxes being levied that neither changed behaviour nor raised much revenue. These included a male servants duty, a more general tax on nonmanufacturing jobs, a tax on entertainments (which lasted until 1960), duty on playing cards, levied for 249 years to no great purpose, a tax on television commercials and an early betting duty so widely evaded that Whitehall gave up after three years. A Tory tax on frequent flying, a modern version of William III’s window tax, would fall into this category.

Rewarding virtue fiscally is much harder than punishing vice. The most detailed plan to relieve work and thrift was an expenditure tax proposed in 1978 by the Meade report, which helped to establish the Institute for Fiscal Studies. It was to relieve all saving from tax but spending financed by running savings down would be hit. The idea died because it had a fatal flaw.

If saving was not to be taxed, the majority of income that people spent would have to face a higher tax rate than before. Expenditure tax also favours the rich and penalises those who cannot afford to save, along with the old, the unemployed and the sick. These groups might not be virtuous but had votes. If allowances were made to counter these drawbacks, the main rate of tax would be higher still.

A similar fate befell the bright hopes aroused by the adoption in Eastern Europe of low-rate flat taxes to foster work and enterprise. They were fine in ex-communist countries, where few paid taxes, but in countries that already rely on whopping income tax revenues to fund public spending, the single rate would have to be much higher than most pay now. Schemes to allow people to opt out of state pensions or welfare benefits have the same effect. Tax rates for most families rise.

The only reliable ways to cut tax rates on work and savings for ordinary families are to axe tax allowances or to cut public spending. Green tax programmes are a response to the high priority that many first-time voters afford to climate change. They can persuade us to switch from one product to another. Unless they fail, they will not be tax neutral.

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