The Chancellor of the Exchequer must deliver on his promise to put sustainability at the heart of his forthcoming Budget, Friends of the Earth said today. The environmental campaign group has drawn up an action plan to tackle climate change, protect our environment and make it cheaper and easier for us all to go green, which it is challenging the Chancellor to implement [1].

In December 2007, Mr Darling pledged that "Sustainability will be at the heart of the next Budget. This is not an optional extra. It is essential for all our futures." [2] But this is not the first time the Government has promised budgetary action to safeguard the environment. In 1997 it said that green taxes as a proportion of overall taxation would rise. Unfortunately environmental taxation has fallen and carbon emissions have risen under Labour [3].

Friends of the Earth's Economics Co-ordinator, Simon Bullock, said:

"It is desperately important that the Chancellor delivers on his promise to put sustainability at the heart of his next Budget. Token green gestures are not enough. We need a radical programme which puts tackling climate change at the forefront of Government policy. This must include a huge shift in taxes away from income, jobs and people and onto pollution, comprehensive measures that make it cheaper and easier for us all to go green, and proper funding to end fuel poverty.

"Strong climate policies could make Britain a world leader in developing a low carbon economy. But it will also bring other benefits including increased energy security, ending fuel poverty, the creation of hundreds of thousands of new jobs and improving the quality of life for us all. We need real political leadership - and we need it now."

Friends of the Earth has drawn up five key measures [4] for the Chancellor to adopt: 

1. Make it easier and cheaper for people to go green. Measures should include:

ï‚·        A stamp duty rebate for people installing renewable technologies or energy efficiency

       measures in their homes

ï‚·        Funds for councils to give council tax rebates for people installing energy efficiency

       measures in their homes

ï‚·        A feed-in-tariff guaranteeing a premium price for renewable electricity generated in people's

       homes and by businesses

ï‚·        A £1 billion fund for the Low Carbon Buildings Programme, with a 50 per cent grant to help

       householders with the up-front capital costs of installing renewable technologies

ï‚·        Car purchase tax on new cars to accelerate the shift to buying low carbon vehicles

2. Create an immediate £5 billion Climate Change Super-Fund to kickstart a much more effective programme to eliminate fuel poverty.

3. Announce a £10 billion tax shift programme raising taxes on pollution and cutting taxes on income, jobs and people.

4. Set a new `green' Golden Rule for Government.

Monitored at Budget time, the Government should ensure that the sum of all its policies will keep the UK within its carbon budget.

5. Toughen up the UK's involvement in the EU Emissions Trading Scheme (EUETS) to boost low-carbon innovation in the UK.

Friends of the Earth has led the campaign for a climate change bill through its climate campaign The Big Ask. The draft bill is currently going through parliament, and Friends of the Earth wants the Government to strengthen it considerably [5].

ENDS

Notes

1. A comprehensive Friends of the Earth briefing - Budget 2008 and climate change - is available at: http://www.foe.co.uk/resource/media_briefing/budget_08.pdf

[2] http://80.69.6.120/newsroom_and_speeches/press/2007/press_143_07.cfm

[3] In 1997 environmental taxes as a percentage of overall taxes stood at 9.4 %. By 2006 this had fallen to 7.3%.

[4] Summary of measures that Friends of the Earth is calling for. Further details can be found in the briefing (see note 1)

Make it cheaper and easier for people to go green

People are constantly being exhorted by the Government to go green and `do your bit'. But it is too often difficult, inconvenient or expensive to do this. The Government should do its bit by making it easier and cheaper for people to go green. The Chancellor should announce an initial programme of reforms to do this, with a further set of announcements by the end of 2008. Initial reforms for this Budget should include:

ï‚·         A Stamp duty rebate for people installing renewable technologies or energy efficiency measures in their homes

ï‚·         Funds for councils to give Council Tax rebates for people installing energy efficiency measures in their homes.

ï‚·         A Feed-in-tariff guaranteeing a premium price for renewable electricity generated in people's homes and by businesses.

ï‚·         Increases to the Low Carbon Buildings Programme, to help householders with the up-front capital costs of installing renewable technologies.

ï‚·         A Car Purchase Tax on new cars to accelerate the shift to buying low carbon vehicles.

Create an immediate £5 billion Climate Change Super-Fund to kickstart a much more effective programme to eliminate fuel poverty

The desperately poor state of the UK housing stock is a major barrier to tackling climate change; it also causes widespread misery because millions of people cannot afford to adequately heat their home.  Current investment in energy efficiency is absolutely inadequate; the Government should create an immediate £5 billion fund to kickstart a much more effective programme to eliminate fuel poverty, funded initially by a one-off windfall tax on the excess profits of the electricity and oil companies.

Announce a £10 billion tax shift programme

The Chancellor should announce a recommitment to environmental tax reform - raising taxes on pollution and cutting taxes on income, jobs and people. He should announce an initial programme of a £10 billion tax shift within three years, with further reforms to be outlined by the end of 2008. Initial increases in the Climate Change Levy, Air Passenger Duty and Road Fuel Duty should be linked to immediate cuts in taxes on jobs and incomes.

A new Golden rule for Treasury

Creating certainty that the UK will do its part in preventing greater than 2⁰C rises in temperature, and certainty about the policy mix to do this, is crucial to creating a clear climate for businesses to invest. Soon the Government will be setting carbon budgets to 2022. The tax and spending decisions of Treasury will be central to delivering these budgets. The Chancellor should set a new third Golden Rule for Government, monitored at Budget time, that the sum of all its policies will keep the UK within its carbon budget.

Toughen up UK's involvement in the EU Emissions Trading Scheme (EUETS) to boost low-carbon innovation in the UK

The EUETS is a potentially massively important policy for tackling climate change. However Phase 1 (2003-2007) was a major failure, due to over-allocation of permits.  Phase 2 (2008-2012) is better, but still weak, and the details are almost all agreed. The Chancellor has a last opportunity now to improve Phase 2, by announcing the maximum permitted use of auctioning and by demanding that all imported credits meet the "gold standard" as an absolute minimum. He should also announce strong commitments to ensure that Phase 3 (2013-2017) is not just incrementally better than phase 2, but a truly effective policy.

 [5] [1] The call for a Climate Change Bill has been led by Friends of the Earth through The Big Ask campaign (www.thebigask.com), which was launched in 2005. The Bill is currently passing through Parliament. It will require legally-binding cuts in UK emissions of 60 per cent by 2050. Friends of the Earth says that the bill should be strengthened to require 80 per cent carbon dioxide cuts by 2050, and include Britain's share of international shipping and aviation emissions.

Contact

Friends of the Earth press office - tel 0207 566 1649

Friends of the Earth Economy Coordinator Simon Bullock - tel 0781 652 9857, email simon.bullock@foe.co.uk