Mr Osborne is likely to announce cuts for those on the basic rate tax and could put forward pay freezes for many public sector workers.

However, Friends of the Earth (FoE) believe ‘the sensible way’ out of the economic downturn is backing measures towards a kick-starting a low-carbon economy.

The group want an overhaul of aviation taxation, which it believes could raise £3bn a year.

A Cut to what it calls ‘wasteful’ road building would save £4.5bn a year which could help cut the deficit and also be spent on greener alternatives.

FoE also argue for a ‘Robin Hood’ tax on banks which could generate about £1.5bn a year

A spokesman for the group, said: “At this delicate time for the UK economy any cuts and tax rises should penalise pollution and not people.

“Slashing public spending hurts families and communities, lowers the amount of tax generated and means people have less cash to spend elsewhere in the economy.”

“Other initiatives including green technologies like renewable electricity and heat will be one of the fastest growing sectors in the UK and beyond, but they need proper support if they are to flourish.

“Investing in energy efficiency will help businesses, households and local authorities save money.

“And new green jobs will also be cost-effective, creating more employment per pound than money spent on polluting alternatives.

“Cutting carbon has to be at the centre of all of the Government’s big decisions over the coming years – that starts now.”

Luke Walsh

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie