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Brown's Budgets have failed the green test

Gordon Brown has produced only one green Budget in ten years, according to a study by Friends of the Earth released today [1]. The publication coincides with reports that the Chancellor may increase taxes on gas-guzzling vehicles.

The environmental campaign group is calling on Mr Brown to put climate change at the heart of Wednesday’s Budget. This would be in line with the recent unanimous vote by Assembly Members to make climate change the first priority of the Welsh Assembly Government [2].

Apart from 1999 [3], the Chancellor's Budgets have failed to tackle environmental issues in general and climate change in particular [4].

Gordon Brown's biggest environmental mistake was his decision to scrap the fuel price escalator (an above inflation rate increase in petrol tax, introduced by the Conservatives) in the Pre Budget Report in November 1999. Friends of the Earth estimates that if the fuel escalator had still been in place, in 2005 the UK's carbon dioxide emissions could have been 14 million tonnes less.

In the eight years before Labour came to power green taxes (as a percentage of overall taxes) rose from 7.8% to 9.4 %. But by 2005 (the latest year which information is available) Gordon Brown had let this percentage fall to 7.7 %.

Friends of the Earth is calling for the Chancellor to announce a package of measures that tax polluting activities and make it cheaper and easier for people to cut their carbon dioxide emissions. This must include substantially increasing road tax for new gas-guzzling vehicles (up to £2,000 for the most polluting vehicles), cutting road tax to zero for more of the most fuel-efficient models, and a range of other measures [5].

Friends of the Earth Cymru spokesperson, Gordon James, said:

“With the exception of 1999, Gordon Brown’s budgets have done little to tackle climate change. Indeed some of his decisions, such as abandoning the fuel price escalator, have actually led to significant increases in carbon dioxide emissions. Mr Brown must use his last Budget to tackle climate change if he hopes to leave a green legacy as Chancellor.

 “The Chancellor must put climate change at the heart of this week’s Budget and introduce a comprehensive package of measures that tax pollution and make it easier and cheaper for people to cut their emissions. This must include significant road tax increases on gas-guzzling vehicles and cuts for greener cars.”

The commissioning of the Stern Review by the Chancellor should mark a turning point, said Friends of the Earth Cymru.

"The conclusion of the Stern Review that climate change will be a disaster for the economy as well as the environment, makes the case for Gordon Brown to take strong action to create a low carbon economy. The Pre Budget Report was a very disappointing first response to Stern, there must be much more action at the Budget."

In December last year, the Government admitted that the cost of motoring has fallen in real terms by over 8 % since it came to power. Meanwhile, the cost of public transport has risen: bus fares by 14 % and rail fares by 5 % [6].

Carbon dioxide emissions have risen under Labour, despite repeated manifesto promises of substantial cuts. The Government has set a target of cutting carbon dioxide emissions to 20 per cent of 1990 levels by 2010.

Notes

1. How Green Was Gordon?  (PDF†)

2. Welsh Conservative party nominated debate: “To propose that the National Assembly for Wales: Recognises that mitigating the impact of climate change is the most important challenge facing the National Assembly and believes that this must become the first priority of the Assembly Government.” Supported unanimously on February 13th 2007.

3. The Chancellor’s best environmental Budget was in spring 1999 when the Chancellor announced the Climate Change Levy, an escalator for Landfill Tax, Vehicle Excise Duty graded by carbon dioxide emissions and company car tax reform.
According to the Government the Climate Change Levy (a tax on the use of energy by business) will deliver savings of over 3.5 million tonnes of carbon annually by 2010.

4. Since the 1999 Budget, the Chancellor has cancelled the fuel duty escalator, halved Air Passenger Duty on short haul flights (the rise at the Pre Budget Report only returned APD on short haul flights back up to their 2000 level) and failed to use VED to give people a real incentive to choose less polluting cars. Recent budgets have been characterised by inaction and caution.

The Chancellor has brought in a number of good micro-measures such as such as cutting VAT on professionally installed solar panels but the impact of these is tiny compared with the failure to raise taxes on polluting activities. He has also failed to put in place a package of strong measures to help to cut the cost of going green such as Council Tax rebates on insulation.

5. Friends of the Earth is calling for a number of green measures including:

Substantially increasing road tax for new gas-guzzling vehicles (up to £2,000 for the most polluting vehicles), and cutting road tax to zero for more of the most fuel-efficient models;

Committing £1.4 billion to fund Council Tax rebates for homes that fit insulation measures to save energy. Introducing Stamp Duty rebates for homes that are made energy efficient within six months of purchase. Reduced VAT on refurbishing homes to a high environmental standard.

£1 billion annually to help economy wide take-up of renewable micro-generation technologies and deal with the crisis in the Low Carbon Buildings Programme.

Announcing plans to publish a strategy for moving the UK towards a low carbon economy. This should include setting out annual carbon budgets for the Economy and policies that deliver this for all sectors.

More information on Friends of the Earth’s Green Budget call can be found at:
www.foe.co.uk/resource/briefings/cleaner_cars_greener_homes.pdf  (PDF†)

6. Hansard written answers: 14 Dec 2006 : Column 1268W

Friends of the Earth is calling on the Chancellor to support calls for the Climate Change Bill to be strengthened so that the UK will become a world leader in developing the solutions to climate change. The campaign for a climate change law has been led by Friends of the Earth through the Big Ask Climate campaign ( www.thebigask.com)

†To view PDF files you will need to download Adobe Acrobat Reader. Visually impaired users can get extra help with these documents from access.adobe.com.