So, what happened? Trailed (yet again) as a green budget from Brown, I blinked and nearly missed it.
Having had five months to digest the implications of the Stern Review, with its overwhelming message of ‘invest now to save economic and environmental crisis later’ you would think we might have seen some weighty green measures being announced today. But, once more, we were frustrated.
Brown’s budgets have not increased green taxes as a proportion of overall taxation since 1999. Since then, the percentage has dropped from over 9% to reach just 7.3% last year. This budget they finally rose again, but the quick-fingered BBC have calculated they will be just 7.5% as a result. Hardly a radical shift in a green direction.
The few specific measures included in today’s speech are too minor to make the cuts we need in our greenhouse gas emissions, and the sad thing is the Chancellor knows it.
The new £400 top rate on gas-guzzling, band G cars (starting at just £300 this year) flies in the face of the government’s own research on what will affect people’s choice of car. They commissioned MORI in 2003 to find out how Graduated Vehicle Excise duty should be structured to be a proper green tax. The results showed that the differences between bands needed to be £300 each to affect even 72% of drivers. This indicates a top rate of at least £1800, assuming you start at zero.
Brown’s half-hearted tinkering with GVED shows there is a really important point he just doesn’t get. Green policies have to have a purpose beyond generating headlines, and ‘green taxes’ have to be based on evidence they will change people’s behaviour and reduce carbon emissions – or they are just ‘taxes’. Brown’s new GVED rates will collect an extra £100 from a lot of 4×4 drivers but are unlikely to have any effect on whether they buy another one next year.
And of course we saw no sign of a return to the fuel duty escalator, the scrapping of which in 1999 is estimated by Friends of the Earth to be responsible for an extra 14 million tonnes of carbon dioxide in 2005. Instead we got an inflation-level 2p on petrol, which will change nothing.
Before the budget, Greens called on Brown to sort out the chaos in renewable energy policy, exemplified by (though not confined to) the farce of the Low Carbon Building Programme household renewable grants running out within days or hours every month since Stern. On 1 March the £500,000 monthly pot ran out within 75 minutes of going on line. Today, Brown increased the LCBP fund by 50%, which is nowhere near enough and will presumably give people about an extra half an hour to get their applications in next month.
Even these grants only cover the ‘can pay’ sector – those who can cover the rest of the cost of solar panels or turbines up front. We have proposed a government scheme of cheap, inflation-linked loans, along the lines of the Student Loan system, to help the rest of us. However, unsurprising in a budget that sold off £6 billion of student loans to the private sector, Brown only mentioned he was ‘consulting with banks and building societies’ on financing home efficiency.
I don’t know if I can even bear to comment on the new ‘tax breaks’ given to those who export electricity from home renewables. Looking at the average capacity of the 2,280 domestic solar electricity systems in the UK, and 400 micro wind turbines (and the low price paid by electricity companies for exports) we estimate each will save a princely £11 or £12 in income tax thanks to this measure. The total cost to the Treasury? A risible £35,000.
The Green Party’s ‘carbon-costed’ budget, released on Monday, would have saved 55 million tonnes of carbon dioxide in 2007/8 alone using radical, evidence-based green taxes, tempered for the poorest with immediate improvements in public transport, as well as steep increases in pensions, tax credits (extended to all, not just those with children) and child benefit.
In contrast, Brown’s budget promises to save just 16 million tonnes of carbon, and even this is likely to be an overestimate, not to mention that the measures announced will take effect over the next 2-10 years. Our budget figures showed that simply returning petrol prices to where they would have been under the fuel duty escalator would save more carbon in a year than Brown’s whole programme announced today.
Our verdict? Not inspiring, not prudent and – if an immediate 3% rise in British Airways’ share price is anything to go on – not green.
More on the budget
Is Brown beginning to look leaden footed?
Tory A-lister Kwasi Kwarteng gives his response to Gordon Brown’s final budget which he sees as rather austere
The budget will exacerbate inequality
John McDonnell who wants to challenge Gordon Brown for the Labour leadership gives his reaction to the chancellor’s final budget