Budget 2020: three investments that will be good for people and the environment
In a week’s time, the government will unveil its first budget. It will be keen to deliver on the big spending promises pledged in the Conservative manifesto, particularly in the newly won northern constituencies. The manifesto also promised to prioritise the environment. So this is the key moment to demonstrate commitment to this promise and take concerted climate action in the run up to the UN COP26 climate talks in Glasgow, now only eight months away.
Recent government announcements have been promising, including a new £5 billion fund for buses and cycling, a proposal to bring forward the phase-out of petrol and diesel vehicles from 2040 to 2035, and a commitment to re-open the market to new UK onshore wind and solar power projects.
Investment that’s good for people and the environment
But the government has a tricky line to walk, between tackling the climate and nature emergency and pleasing their new ‘red wall’ MPs. We have already seen the Treasury back off from unfreezing the fuel duty escalator, due to concerns that it will unfairly impact these constituencies. It has been calculated that the freeze on fuel duty since 2011 has produced an extra 4.5 million tonnes of carbon emissions and 12,000 tonnes of NOx emissions from additional traffic on the roads. It has also cost the Treasury £46 billion.
We see similar difficulties with other policies floated before the budget, including cutting air passenger duty for domestic flights. This, in effect, is an incentive to use the most polluting form of transport – and would stand in stark contrast to the Government’s decision not to appeal the ruling against Heathrow last week. But there are genuine and important questions to be asked about how the decarbonisation agenda can also build a fairer society.
So where can the government invest in a way that is good for the environment, delivers on the investment pledges made in the Conservative manifesto, and in a way that brings people across the country along with them?
The good news is that many of the policies needed to restore nature and tackle climate change are also better for people. Below, we set out the three areas of spending that would be good for people and the environment. This is based on recommendations developed by a joint-NGO report on the public investment required over the next three years for a fairer and greener economy, and in our analysis showing five policies needed to get the UK on track to net zero.
Leaky, inefficient homes raise energy bills, cause higher emissions and, last year, it is estimated that 17,000 people died due to cold housing. Solving this problem is long overdue. Research commissioned by the Energy Efficiency Infrastructure Group has shown that an additional £1 billion of government investment a year in energy efficiency can leverage a further £3.5 billion of private investment. The budget should, therefore, commit to spending an additional £1 billion in this budget on an energy efficiency programme.
This could help the most fuel poor in society with a specific pot of money for ‘whole-house’ net zero retrofit of social housing. As we have shown, social housing could act as a launch market for net zero homes in all housing tenures, and this policy fits neatly into the £3.8 billion ‘Social Housing Decarbonisation Scheme’ promised in the Conservative manifesto.
It could also include new incentives or support to reduce the cost of finance for energy efficiency in ‘able to pay’ (people who could pay for it themselves) households – including schemes like zero interest loans, delayed repayment plan, grants, or green mortgages.
Air pollution disproportionately affects those in more deprived areas, and public transport in northern communities has been historically underfunded. The announcement of a new £5 billion fund for buses and cycling infrastructure outside London is welcome, but there needs to be much more detail on how this money will be spent in a way to empower communities to shift the way they travel. A similar investment pledge is needed for train lines throughout the UK, particularly for areas outside the south east.
Similarly, accelerating the uptake of electric vehicles (EVs) will help to cut air pollution, as well as kick-start the market for second-hand electric vehicles, to make them more accessible to lower income families. An additional £50 million a year spent on new charging stations in this budget should achieve an even coverage of charging infrastructure throughout the UK, including rural areas. The EV plug-in grant should also be extended to 2025, which is when EVs are projected to become the cheapest vehicles to own on a lifetime basis.
3. Agriculture and the environment
The Agriculture and Environment Bills are both moving through parliament at the moment. The Agriculture Bill contains exciting proposals to pay farmers to provide the ‘public goods’ of flood management, soil management and carbon sequestration; while the Environment Bill will help to set up a new Office for Environmental Protection, to help protect vital habitats across the UK.
But new investment will be needed to support the aspirations of these bills as they gain royal assent and become law. The budget should commit to fulfilling the Conservative party manifesto pledge to plant at least 30 million trees a year, taking into account biodiversity and landscape impact, as well funding the enhancement of habitats like saltmarsh, wetlands and peatland, as promised in the 25 year environment plan. The chancellor should also announce adequate resources to fulfil the ambitions of the Environment bill, including sufficient funding to run the Office for Environmental Protection effectively.
We will be monitoring and assessing the environmental impacts of this budget under our Cutting Carbon Now project, with a net zero policy tracker which emphasises the gaps that need filling in funding and meeting carbon reduction targets throughout this year. We look forward to updating this next week with significant new government investment to close these gaps.
[Photo from Flickr courtesy of Tom Page]