What’s Green In The UK Coalition’s Emergency Budget?


download (3)Today’s emergency budget from the UK’s Conservative-Liberal coalition government has been pre-empted in the press as many things. The austerity budget. The bloodbath budget. The brutal budget. A game-changing budget.

But with the coalition parties having most in common with each other on environmental matters, one question begs to be asked: was today’s budget a green one?

Separating the economy from the environment is now almost impossible in the country which introduced the world’s first government Carbon Budget. After March 2010’s second Carbon Budget, which brought little new to the environmental table due to the recession other than promises for a new green investment bank and an energy market review, environmentalists started to look for clues in the election manifestos of the main political parties to see what else would soon emerge from Westminster.

The green investment bank was the first measure announced to please environmentalists, with the intention of driving investments into low-carbon technologies. Green start-ups will also be happy with no National Insurance to pay for the first 10 employees of a company if located outside the south-east of England, and an overall emphasis on capital spending and local investment on job and wealth creation in the private sector.

A lowering of the corporation tax paid by small businesses to 20% will also assist those looking to break into the clean technology arena, and green entrepreneurs will also benefit from an massive increase in the 10% capital gains rate threshold from the first £2m in a lifetime to the first £5m.

The coalition has continued the previous administration’s pledge to reduce the government’s own emissions by 10% over the next 12 months, and to oversee energy market reform to help drive new investments in green power generation to combat the country’s ensuing energy shortage. The Department for Energy and Climate Change has also seen it’s budget largely unchanged by today’s announcement.

Interestingly, the government seems ready to act on the carbon markets. Worried that the unstable and low price for carbon is scuppering the effectiveness of the Climate Change Levy, the coalition announced in the budget document a forthcoming review with the aim of adding greater stability to the carbon markets in order to help drive investment. There is a chance that conclusions reached by this review might have an impact on the nature of the CRC Energy Efficiency scheme later on as well.

The coalition government also announced in the emergency budget that it would be continuing with the Conservative’s election manifesto pledge to create a Green Deal for households to help improve their energy efficiency, especially for low-income households. Details on the timetables involved were negligible, however.

One big expected change failed to make the rushed cut for the emergency budget, much to the chagrin of climate change activists. Air travel taxes were expected to be charged per plane rather than per passenger, meaning much lower profits for airlines operating flights with empty seats, nudging aircraft to reduce flights and run those remaining at higher capacities and therefore higher efficiencies (flying is greener than driving at high passenger numbers). Instead, the measure is expected to be delivered in the autumn, and environmentalists will have to be content for now with the announced scrapping of Heathrow’s third runway expansion.

With essentially very little separating the Conservatives from the Liberal Democrats on environmental issues (except that the Liberals scrapped the green section of their manifesto and instead brought green measures into every single other area of the document), the environment is the glue which keeps the two parties together and is what they feel they can achieve most from during the coalition. Today’s budget showed that despite the recession and the need for immediate and strong spending cuts, the goal of a green sustainable future lies very much at the heart of the coalition Budget.

Image of George Osbourne from a photo by Loz Flowers @ Flickr

Read more: http://www.energy-savingnews.com/2010/06/green-uk-coalitions-emergency-budget/#ixzz0raexYWsE
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