Budget 2021: was it good or bad for low carbon?
Unsurprisingly, Rishi Sunak’s Budget was razor-focused on Covid. Was anything left over for the environment?
Covid dominated Budget 2021 and whilst the Chancellor could not be blamed for putting the virus centre stage, here’s the Content Coms view on whether he did enough to build a green legacy this year.
Green with envy?
Let’s begin with the usual Content Coms assessment criteria: Budget 2021, mentions of low carbon; none.
Hardly an auspicious start, but; mentions of Net Zero, seven. What do these mentions cover?
Well, there is a new National Infrastructure Bank; ‘The UK Infrastructure Bank will partner with the private sector and local government to increase infrastructure investment to help tackle climate change and promote economic growth across the UK.’
There are some, ‘Green energy innovation schemes from the government’s £1 billion Net Zero Innovation Portfolio to support the development of new solutions to cut carbon emissions and accelerate near-to-market low-carbon energy innovation.’
Further, there is a new £375 million fund to help scale up the most innovative, R&D intensive businesses. This isn’t specifically green, but the following sentence says it will also, ‘Help spread opportunity across the UK, achieving the government’s ambition of levelling up every part of the country.
‘They [this and other funds] will also be crucial to supporting the government’s vision for a Global Britain, and contributing to the transition towards a Net Zero society.’
There’s also a note that the description of the Government’s economic policy has been updated to reflect the importance of environmental sustainability and the transition to Net Zero.
‘Environment’ storms into Budget 2021 with a stonking 11 mentions, most of these are just within charts though. There is an intriguing nudge to a new green gilt framework, to be published in June 2021, which will detail the types of expenditures that will be financed to help meet the government’s environmental objectives.
Planned green gilt issuance for the financial year 2021-22 will total a minimum of £15 billion.
Carbon gets 19 mentions, again mostly in charts. But there is the launch of a £20 million programme to support the development of floating offshore wind technology across the UK, a new £68 million UK-wide competition to implement several first-of-a-kind energy storage prototypes or technology demonstrators, plus a £4 million UK-wide competition for the first phase of a biomass feedstocks programme.
What’s the reaction to the Budget? Largely muted it seems. No ‘green revolution’ from Sunak, said the BBC.
The BBC, albeit tacitly, notes how more powerful The Red Box might have been; ‘The Green Alliance wanted the Treasury to test for all government spending decisions against whether they would help the environment.
‘It has also been campaigning for a Net Zero compatible tax system, achieved through VAT reforms…The group had hoped these might be included in the Budget but they were disappointed.’
Elsewhere, The Guardian majored on changes to the Bank of England. ‘The chancellor has changed the remit of the Bank of England’s interest rate-setting monetary policy committee to include a duty to support the government’s Net Zero carbon ambition,’ it wrote.
‘Under the green upgrade, the Bank must support the government’s strategy to transition to an environmentally sustainable and resilient Net Zero economy. The surprise extension formed part of an otherwise modest set of Treasury measures to help spur the UK’s burgeoning green economy.’
The Financial Times interrogated things, saying, ‘A UK Infrastructure Bank with capital of £12bn will not amount to much. Where is the ambition for investment?’
EDIE said the Chancellor has come under fire for failing to mention a number of critical policy enablers for the UK’s Net Zero carbon transition.
Could it ever have been any different?
A single line from EDIE’s analysis is especially noteworthy; ‘All in all, the new Covid 19 recovery measures announced today will total £65bn over the next 12 months.’
Yes, that’s £65 billion. And yes, that is just new money spent on Covid.
It opens a mind-blowing can of worms. After a decade of austerity, all efforts to balance UK PLC finances have been wiped out, replaced instead by an almost unimaginable national debt.
Ground-trembling sums have been spent on trying to weather a truly shocking and historical year. There simply wasn’t the will, the space, the time or the cash to give environment the resources it requires.
But we know green jobs are longer term jobs. We know fossil and legacy industries can’t deliver growth needed to pay back the Covid debt.
And we also have learned that failing to heed warnings can have the most unpleasant consequences; voices had spoken out on the risk of a pandemic, in the same way they continue to warn of the present and coming climate crisis.
The Content Coms opinion on Budget 2021: it was inevitable, perhaps, that environment would miss a trick. A genuine emphasis on green growth as a way to pay off Covid’s vast costs? Sorely lacking.
If you’re looking for more detail on Mr Sunak’s plans for the low carbon arena – take a read of Esther Griffin’s guide to the Spring Statement.