Content Coms asks: can the Spring Budget 2017 offer greener UK business a shot in the arm? Maybe, just maybe…
Our features writer and green business expert Giles Crosse predicts what’s in store for the low carbon economy on Budget day.
Theresa May’s Government will publish its Spring Budget on Wednesday, 8 March 2017. Ahead of this key date, lobbying calls are now flying out from the low carbon sector.
The Energy and Utilities Alliance (EUA) helps shape future policy direction within energy. It is calling on the Chancellor to create long term security, and an affordable, sustainable future.
Isaac Occhipinti, Head of External Affairs at EUA, said: “We are acutely aware that major policy changes under the current Government are yet to be revealed, but we call on Phillip Hammond to take the necessary steps to make the UK’s energy affordable, sustainable and secure.”
Such pleas are common, but a key disconnect surrounds pressing green business objectives home, against Brexit’s stranglehold on UK politics.
Is there any way to break Brexit’s grasp? How much space, in the month Article 50 is due, is left over for sustainable policy making?
Industrial Strategy and budgetary hope for change
Economia writes, ‘There will be more flesh provided around some of the bones of the recently launched Industrial Strategy, especially on infrastructure.
‘Although the consultation period for the Government’s green paper does not end until mid-April, there will be ways in which Hammond will want to set the tone for future actions.’
This is vital. With the right developments, putting meat on the bones of the Industrial Strategy could signal a promising 2017 for low carbon. David Woodward, Tax Partner at KPMG in the UK, told Economia, “The Prime Minister has already signalled the Government’s intention to improve support for R&D to make the UK more competitive in this regard.
“At the Autumn Statement the Chancellor announced that the Government would review the tax environment for R&D and the Chief Secretary to the Treasury recently confirmed this review is due to conclude at the Spring Budget. We are therefore likely to see some announcements on this on 8 March.”
Surely there’s no more valuable R&D to support than that which creates new low carbon tech? Money and further concrete announcements here, along with improvements to burdensome taxation and charging, on elements like battery storage, would be most welcome.
Incidentally, a very useful, recent overview of low carbon and how it plays, and might play better with the Industrial Strategy is available here.
The upshot is; Hammond is under pressure to prove he can grow the economy. The Industrial Strategy is a central Conservative policy tool, and it has vast scope for sustainability, and it sits well with Brexit needs for a more competitive UK.
Therefore, it’s within the Strategy that any good news for low carbon will likely come in this Budget.
Post Brexit competitiveness
The trouble is, R&D growth, green jobs and a sustainable Industrial Strategy must square up against, “The need to provide a war chest against any possible negative impact from the triggering of Article 50, now expected around 15 March, and the subsequent negotiations with the EU as to the UK’s exit,” described to Economia by Jonathan Riley, Head of Tax, Grant Thornton UK.
The problem’s simple; Conservative policy makers will want to insulate themselves against criticism, by banking cash for if, or when, negative Brexit implications come home to roost. They won’t want to promise riches and withdraw them should Brexit prove damaging.
With this in mind, PWC’s Andrew Sentance fears there’s simply insufficient scope for Hammond to be bold right now. Bear in mind too that the Chancellor is switching to a one yearly Budget from now on. With all encompassing Brexit in the headlights, it seems logical to predict he may well hold back on major announcements until the Autumn.
By then, for better or worse, Article 50 should have been triggered. We will be further down that treacherous path, enabling Hammond to judge more clearly what financial headroom he has, and what financial treats he can use to deflect public attention away from Brexit negotiations, which by then could be going haywire.
Content Coms will bring you the key announcements, as they roll in, this coming Wednesday.
Content Coms is one of the UK’s leading B2B communications consultancies specialising in the energy, low carbon and technology sectors. If you’ve enjoyed our article, how about reading more of our energy news and analysis?