March 2007
Budget 2007
The Budget 2007 hardly represented the green revolution we were expecting, but following the clash with David Cameron earlier this month over his green credentials, the Chancellor has not back-tracked on his vision for the environment in this year's budget.
The main issues raised covered:
- An increase in the climate change levy in line with inflation, from 1 April 2007.
- Building upon the previous household energy efficiency drive through the provision of an extra 250,000 subsidised insulation installations. Also, the trialling of “smart” energy meters, voluntary schemes for businesses to reduce energy consumption through increases in product efficiency, as well as local authority led incentives for individuals.
- The development of a new National Institute of Technologies, with private sector involvement, to better utilise public sector funding of energy research. This is in conjunction with further funding for the development of alternative energy sources, in particular, £50m to develop micro-generation technologies and commercial scale carbon capture/storage abilities.
- Reforms to vehicle excise duty, reducing the rate to 0 for cars with the very lowest carbon emissions, and introducing a new top band for the most polluting cars. Road tax on the most polluting cars is now £300 per annum, up from £210 and is set to rise again to £400 in 2008.
- New, zero carbon homes up to the value of £500,000 to be exempted from stamp duty until 2012.
- The standard rate of landfill tax to be raised by £8 per tonne to £32, in order to encourage alternatives such as recycling and the burning of waste for energy. Moreover, the tax will continue to rise by £8 per tonne each following year until 2010.
- £800m for the environmental transformation fund for the developing world, as well a further £50m project to protect rainforests around the world
The Chancellor highlighted that the environmental measures in the budget would lead to a 16m tonne reduction in carbon emissions. He continued that his “objective for Britain is the lowest carbon cars using the least polluting fuels."
However, he failed to address what many environmentalists regard as the elephant standing atop of the dispatch box: aviation. Greenpeace Director, John Sauven decried Brown’s over the issue, stating “No budget which claims to be green can ignore the huge impact planes are set to make on the climate.” Conservative calls to add VAT to airline tickets were similarly rebuffed as Gordon Brown charged that such a tax would save less carbon in one year that the climate change levy would save in a week, a figure which they have subsequently disputed.
But if there is some good news to be salvaged from this month in politics, it was not to come from the budget. In spite of the fact that the budget was viewed as somewhat of a false dawn in environmental protection, the publication of the government’s draft Climate Change Bill has excited environmentalists. Its framework sets out a vision for moving the UK to a low-carbon economy, with its key point being the clear target for reducing CO2 emissions being made into a legally binding figure. Thus the targets of a 60% reduction by 2050 and 26-32% reduction by 2020 would become an imperative for both public and private sector actors. Where a week is long time in politics, committing to a 43year plan is an absolute age, and the government should be congratulated on this, if nothing else.
Print this page