Budget lacks urgency needed to tackle the climate crisis

“If anything sums up this government’s commitment to a green recovery and jobs for the future, it’s building a coal mine that we can’t even use.”

That was opposition leader Keir Starmer’s stark verdict on the green measures outlined by chancellor Rishi Sunak in his Budget announcement on Wednesday afternoon.

“This Budget should have included a major green stimulus, bringing forward billions of pounds of investment to create new jobs and new green infrastructure,” he added.

His words were echoed by environmental campaigners and analysts, who described the measures announced in the Budget as a “drop in the ocean” compared to what is needed to address the climate crisis.

“For all the talk of a green recovery, this Budget suggests the chancellor has failed to clock the urgency of the climate emergency,” said Rebecca Newsom, head of politics for Greenpeace UK.

Dr Mirabelle Muuls, an assistant professor in economics at Imperial College London, said the Budget announcement was “a missed opportunity” to put forward world-leading green measures ahead of Cop26, a crucial round of UN climate talks that will be hosted by the UK later this year.

“Despite the climate emergency, there seems to be a missed opportunity to ensure that climate change criteria are included in all parts of the Budget,” she said.

“This Budget is definitely not the net-zero recovery plan so many had hoped for in the year of Cop26.”

Green homes grant controversy

The Budget makes no mention of the green homes grant, a flagship scheme launched last year aimed at encouraging people to make energy efficiency improvements to their houses.

The scheme has been plagued by controversy after ministers admitted that just a fraction of the vouchers on offer had been successfully claimed, and that around £1bn of unspent money was to be withdrawn.

This is despite the fact that the UK’s homes currently account for around 14 per cent of its total emissions – and that the country’s climate advisers have said that Britain will need to rapidly retrofit its housing stock if it is to meet its net-zero goal.

Fatima Ibrahim, co-executive director of Green New Deal UK, a non-profit organisation, said: “The failure to reform and extend the green homes grant shows that this government is not at all serious about tackling climate change or fuel poverty.

“We have some of the leakiest homes in Europe and every year tens of thousands are left to die in freezing cold homes. We need an army of retrofitters to insulate every home in Britain and create hundreds of thousands of good jobs. Considering the scale of the challenge facing UK housing, this omission is an outright failure.”

Sam Alvis, head of green renewal at the think tank Green Alliance, said the omission of the green homes grant from the Budget was “an elephant in the room”.

“The grant was the government’s flagship green job programme, but its absence from the Budget gives little confidence that it isn’t going to be scrapped. Pulling moderate spending packages like this is not a good sign.”

The Independent understands that the Green Homes Grant scheme is currently under review.

Fuel duty freeze

In his Budget speech, Mr Sunak confirmed that fuel duty will be frozen for the 11th year in a row. The decision means tax paid on petrol and diesel will remain at 57.95p a litre, the same price as in 2011.

Analysis by the climate website Carbon Brief previously found that the freeze in fuel duty since 2010 has caused the UK’s CO2 emissions to be as much as 5 per cent higher than they would have been.

“It’s astonishing that a government pledging to confront the climate emergency has frozen fuel duty yet again,” said Mike Childs, head of policy at Friends of the Earth.

“No wonder passenger cars’ contribution to the climate crisis has barely fallen in the past decade.”

open image in gallery

Jonathan Bartley, co-leader of the Green Party, also criticised the decision to continue the fuel duty freeze.

“The freezing of fuel duty is another disappointment, but we would have gone much further than just returning to the annual escalator by imposing a high and rising carbon tax on all fossil fuels,” he said.

“A carbon tax is the fastest and most efficient way to make the biggest polluting companies pay for the carbon they emit, signalling to markets that we are serious about rapid progress towards net zero.”

Positive steps

The chancellor announced some measures that were welcomed by green groups.

This included the confirmation of a new UK Infrastructure Bank to finance projects aimed at helping the country reach its net-zero goal.

“Located in Leeds, the bank will invest across the UK in public and private projects to finance the green industrial revolution,” Mr Sunak said.

“Beginning this spring, it will have an initial capitalisation of £12bn and we expect it to support at least £40bn of total investment in infrastructure.”

The chancellor also confirmed earlier reports that the UK is launching a green bonds scheme to give investors the opportunity to buy into projects aimed at helping the country get to net zero.

Campaigners welcomed the schemes, but said there was still not enough detail about how they would operate in practice.

“An Infrastructure Bank and green bonds could be steps forward, but without a guarantee they will provide sustained investment to decarbonise buildings, transport and industry, they are unlikely to do much to advance climate action,” said Ms Newsom.

Mr Sunak also confirmed reports that the Bank of England’s mandate is to be updated to include a greater focus on measures to tackle the climate crisis. Analysts described this as a “promising” move, but again said the fine details of the Bank’s change in remit were not yet clear.

Unanswered questions

An overarching issue with the green measures included in the Budget is that they are “thin on detail”, Dr Jonathan Marshall, head of analysis at the Energy and Climate Intelligence Unit (ECIU), a non-profit based in London, told The Independent.

“The Budget has always been a little green tinge around the edges rather than being green all the way through,” he said.

“It’s a quite worrying indication for how the department is thinking [on climate change].”

Striking a similar tone, the UK’s top climate adviser Chris Stark said in a tweet that there was “not much to say about the Budget”. He added that this was “a comment in itself”.