Change Alley

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Green Budget, Black Hole

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Alastair Darling puppet in boxIs it time for Alistair Darling to be put out with the trash? Criticism of his performance as Chancellor of the Exchequer began as soon as he accepted the poisoned chalice of succeeding Gordon Brown last year. Yesterday’s budget, Darling’s first, has been widely condemned for not living up to its advance billing as a ‘green’ budget containing radical measures to address climate change.

Climate change got a mention right at the top of his speech, but nothing that followed looks as if it will come close to doing anything useful to fix it.

Here are the main green measures announced yesterday, in no particular order:

  • The worst polluting cars will be taxed a bit more, cleaner cars will be taxed a bit less.
  • Electricity companies may have to buy all of their permits to emit carbon after 2012.
  • Retailers who fail to restrict the use of disposable carrier bags will be forced to charge a levy on them.
  • A new aircraft duty, charged per jet instead of per passenger, will raise 10% more revenue in its second year of operation.
  • All new office buildings must be ‘zero carbon’ by 2019.
  • From next year, the Budget will incorporate a ‘carbon budget’, setting out a 5-year plan for UK carbon emissions.

And that, apart from the usual increase in duty on booze and fags, was pretty much it. Feeble stuff, from an environmental standpoint, which has generated some understandable heat:

“It is still very unclear from a consumer and corporate perspective how the vast majority of carbon reduction will be delivered.”
(Frank Sangster, head of KPMG’s environmental tax and incentives group)

“This certainly was not a green Budget, at a time when both the domestic sector and industry needed a green Budget.”
(Gareth Stace, head of environment at the EEF manufacturers’ organisation)

“The chancellor promised to put sustainability at the heart of today’s announcement, but he has merely tinkered in the margins. He should have made it cheaper and easier for people to go green.”
(Tony Juniper, director of Friends of the Earth)

“It’s clear the chancellor has huge holes in his accounts and is trying to hide an old-fashioned tax grab behind a bags and alcohol smokescreen.”
(Stephen Robertson, director-general of the British Retail Consortium)

The measures announced yesterday would achieve a 5% emissions reduction by 2015, well short of our obligation to cut emissions by 20% under EU proposals. The new green taxes will raise an extra £1.6bn this year, rising to £1.77bn by 2011. This masks the fact that the proportion of tax revenue coming from green taxes will actually fall very slightly to 6.91% in 2008-09.

The general consensus among financial commentators is that the Chancellor’s view of the world economy’s current problems, and Britain’s positioning to cope with them, is very optimistic. He forecast increased inflation and reduced growth, portraying Britain as simply a victim of global economic turbulence. He also forecast a marked increase in borrowing, which is worrying against a background of market turmoil and credit squeeze. In predicting a strong rebound for the UK economy next year, based on the most optimistic set of figures he could lay his hands on, he seems to be whistling in the dark with his fingers crossed.

Could it be that all the spin about a ‘green’ budget, and the inevitable disappointment when it turned out to be nothing of the sort, was just a ruse to distract us from the real problem? We have a world economy in real trouble, the UK may well get dragged down by forces outside its control, and the government doesn’t have a clue what to do about it apart from trying to plug some of the black hole in its finances with cynically-spun ‘green taxes’.

We should never forget that a healthy environment relies on a healthy economy. Environmental investment is traditionally first to go when money’s tight.


Written by Pete Smith

March 13, 2008 at 3:18 pm

One Response

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  1. Radical measures! There’s bugger all radical about them.

    What really gripes me is the money that’s available to spend on futilities such as Trident.


    March 14, 2008 at 2:43 pm

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