Cable and Hammond fight on as Osborne swings his axe again

Six more departments agree to cuts but Defence, Business, Education, Work and Pensions and Transport are yet to settle.

George Osborne's unusual running commentary on the Spending Review continues. In addition to the seven departments previously named as agreeing to cuts of "up to" 10 per cent, the Treasury has announced that Osborne has reached settlements with the Home Office (with counter-terrorism policing protected), DEFRA, DCMS, the Scotland Office, the Wales Office and the Law Officers Department (incorporating the Crown Prosecution Service, the Treasury Solicitor's Department and the Serious Fraud Office), all of which will be cut by an average of 8 per cent. The seven to settle last month were Justice, Energy, Communities, the Foreign Office, the Cabinet Office, the Treasury and the Northern Ireland Office.

But while the majority of departments have now agreed to further cuts, the absence of some of the biggest spenders from the list (Education and the DWP, as well as Transport and Business) means that, with just 12 days to go, the Treasury still has less than a third (£3.6bn) of the £11.5bn of cuts sought by Osborne. 

Health, International Development and the schools section of the Education budget are all officially protected but the rest still face the Chancellor's axe. Although Theresa May, one of the ring-leaders of the famed National Union of Ministers (NUM) has settled, Vince Cable (Business) and Philip Hammond (Defence) are fighting on. After the head of the army Sir Peter Wall warned that further cuts could damage the force's "professional competence" and "become quite dangerous, quite quickly", the latter is under particular pressure to prevent significant reductions. But Alexander made it clear that he was in no mood to offer special treatment. "In a department where there are more horses than tanks there is room for efficiency savings," he told Sky News. As for Cable, he has previously warned that "further significant cuts will do enormous damage to the things that really do matter like science, skills, innovation and universities", a message that was echoed by the CBI in its Spending Review submission this week. It suggested that £700m of medical research funding currently paid for by the Business Department could be transferred to Health, a move that would break the spirit, if not the letter, of the NHS ring-fence. 

Alexander also signalled that while there would be no further welfare cuts (after £3.6bn were announced in last year's Autumn Statement), this did not mean the Department for Work and Pensions was protected. He pointed out that welfare spending is classified as "annually managed expenditure", rather than departmental spending, adding that "there are lots of areas where the DWP has the capacity to make savings". 

Defence Secretary Philip Hammond stands in front of a Rapier System ground-to-air missile launcher during a visit to RAF Waddington near Lincoln. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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The post-Brexit power vacuum is hindering the battle against climate change

Brexit turmoil should not distract from the enormity of the task ahead.

“The UK will not step back from that international leadership [on clean energy]”, the Secretary for climate change, Amber Rudd, told a sea of suits at Wednesday's summit on Business and the environment.

The setting inside London’s ancient Guidlhall helped load her claims with a sense of continuity. But can such rhetoric be believed? Not only have recent events thrown the UK's future ability to lead on climate change into doubt, but a closer look at policy suggests that this government has rarely been leading to start with.

Rudd’s speech came just 24 hours before she laid the order of approval for the UK’s fifth Carbon Budget. This budget will set our 2028-2032 emissions target at a 57 per cent reduction on 1990 levels – in line with the advice of the independent Committee on Climate Change. And comes amidst a party-wide attempt to reassure green business that Britain is open as normal: "I think investors now should feel they have a very clear path ahead," Andrea Leadsom has insisted.

In some respects, those wanting to make the case for an independent UK, could not have wished for a better example than the home-grown carbon budget. The budget is the legal consequence of the UK’s ground-breaking domestic 2008 Climate Change Act, which aims to cut emissions by 80 per cent by 2050. And the new 57 per cent interim target also appears to put the UK ahead of European efforts on the matter - exceeding the EU goal of a 40 per cent emissions reduction.

The announcement will thus allow David Cameron to argue that he has fulfilled his husky-loving promise to provide leadership on the environment. He may even make it the basis for an early ratification of the Paris Climate Agreement, ahead of the European bloc as a whole.

Yet looked at more closely, the carbon budget throws the UK’s claims to climate leadership into serious doubt.

In the short term, its delayed, last moment, release is a dispiriting example of Westminster’s new power-vacuum. Business leaders, such as those at yesterday’s conference, are crying out for “consistent, coherent and predictable national policies” on climate change and emissions reductions. Yet today’s carbon budget can only go so far to maintaining the pretence of stability.

Earlier this week, Amber Rudd responded to a parliamentary question into how Brexit will effect the UK’s climate ambitions with a link to none other than the Prime Minister’s resignation speech. And while concrete progress on policy will have to wait for party-political power struggles politics to run their course, historic Tory hostility to green policy makes progressive change far from certain.

Supporters of Brexiteer Boris Johnson may have played down his opposition to action on climate change in recent days, quipping that he would sooner be “kebabbed with a steak knife over the dining room table” by his environmentalist father. But the recent appointment of UKIP’s Mark Reckless, from a party notorious for its climate scepticism, as the new chairman of the Welsh committee on climate change has sent shock waves through the environmental community and will do little to help allay investor fears.

More concerning still is the 47 per cent shortfall between emission targets and present reality. A progress report released today is damning evidence of the Conservative's long-term neglect of the underlying issues.

Such censure builds upon the findings of a recent study from the Energy and Climate Intelligence Unit. Far from leading Europe’s major nations on issues of energy and climate change, their research finds the UK to be distinctly middle of the pack. “Of the ‘Big Five’ economies with comparable levels of population size, GDP, ect., Britain ranks third, behind France and Spain but ahead of Italy and Germany”, write authors Matt Finch and Dr Jonathan Marshall.

A significant number of incentives for government action – such as fines for not meeting interim targets on energy efficiency – would also be nullified in the instance of Brexit. And it cannot even be claimed that our long-term ambition is greater than Europe’s: the UK’s target is an 80 per cent cut between 1990-2050, and the EU’s is 80-95 per cent.

News that the manufacturing giant Siemens is suspending new investment into its UK-based offshore wind operations could thus be set to prove symptomatic of a wider trend. And ministers must act fast to turn promises into policy.

Even  Michael Gove - the man who once wanted to take climate change off the curriculum – now describes as one of the world’s greatest challenges. While according  to the new shadow secretary for energy and climate change, Barry Gardiner: “The government can no longer wait until December to publish its Carbon Plan. It must do so now.”  

Included in such a plan should be clarification of the UK’s relationship to European emissions trading, the development of a Carbon Capture & Storage strategy, and urgent action on heating and transport efficiency. The 5th Carbon Budget is an important step towards this process but Brexit turmoil should not distract from the enormity of the task ahead. Nor from the damning fragility of Cameron’s environmental legacy to date.

 

India Bourke is the New Statesman's editorial assistant.