Chancellor George Osborne delivered his emergency Budget today, with barely a mention of green measures, but promising big spending cuts for Government departments, including those charged with delivering a low carbon Britain.
Introducing it as a "tough but also fair"
Budget, Osborne unveiled plans to raise taxes – including a rise in value added tax from 1.75 per cent to 20 per cent and a banking levy – and to slash spending.
Non-ring-fenced Government departments, including the Department of Energy and Climate Change (DECC) and the Department of Food and Rural Affairs (Defra) will be among those hardest hit by the cuts, with average budgets slashed by 25 per cent over the next four years.
The Coalition Government has pledged to be the greenest Government ever and says it is committed to playing its part in moving to a low carbon economy, but today’s speech by the Chancellor will have done little to encourage green businesses and campaign groups that it is prioritising a green economic recovery.
In an hour-long speech the Chancellor set out how the Coalition Government plans to bring down the UK’s vast deficit, but made no mention of a planned floor
price on carbon and went only so far as to say the Treasury would "explore" proposals to switch from a per-passenger duty to a per-plane duty, which could encourage fuller
planes and help tackle
carbon emissions.
Instead, the Government will publish proposals to reform the climate change levy in the autumn in order to provide "more certainty and support" to the carbon price.
In his speech, the Chancellor reiterated the Coalition Government’s plan for a Green Investment Bank, but provided no detail on how such a bank would be
financed.
Instead, the Government is delaying putting forward detailed proposals on the creation of a Green Investment Bank until after the Spending Review in October.
No cuts to capital spending
In a move that he said would help the needs of a "modern economy", Osborne said the Government would not cut capital spending, a measure that could help deliver Britain’s low carbon infrastructure. "[There will be] no further reduction in capital spending totals in this Budget," he said.
In a bid to help the private sector, which the Government sees as leading the UK’s economic recovery, Osborne also unveiled a cut in corporation tax for businesses. However, to offset some of these tax cuts, Osborne said investment in capital allowances would be reduced from April 2012, a measure that could hit investments in
energy efficient equipment.
Help for the regions
There was also help for the
regions, through a Regional Growth Fund and a National Insurance Contributions holiday for new businesses which start-up in areas outside of London and the South East over the next three years.
The Budget, meanwhile, confirmed some previous announcements to help tackle climate change and carbon emissions. These include increasing the standard rate of landfill tax by £8 per tonne on April 1 2011 until at least 2014, and introduce a floor so that that the rate will not fall below £80 per tonne until at least 2020, and to reform company car tax so that it continues to provide an incentive to purchase the lowest emitting vehicles on the market.
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