Archived press release

Pre-Budget Report a key test of Brown's green credentials

5 October 2007

The Pre-Budget Report (PBR) on Tuesday will be a key indicator of Gordon Brown's long-term commitment to tackling climate change, Friends of the Earth said today. The PBR could be one of the Government's final acts before calling a General Election.

In his speech to Labour's annual conference last month [1], Gordon Brown promised to make the UK a world leader in developing a low-carbon economy. He said "I want Britain to lead in carbon-free vehicles, carbon-free homes and carbon-free industry."

Friends of the Earth is urging Alistair Darling to show voters that Mr Brown's Government is determined to tackle global warming by introducing a range of measures to make it cheaper and easier to cut carbon dioxide emissions. These should include [2]:

Helping householders to cut carbon dioxide emissions by:

Council tax and Stamp Duty rebates for people installing energy efficiency measures in their home;
Increasing grants for installing renewable energy technologies;
A guaranteed premium price (feed-in tariff) for people who sell excess renewable electricity generated from their homes to the National Grid;
A cut in VAT for refurbishing homes to high environmental standards.

Helping motorists to drive greener cars by:

Introducing a purchase tax for gas-guzzling vehicles, and reducing the tax for buying new low-emission cars;
Introducing a £1billion a year Carbon Reduction Fund, to invest in greener alternatives to motoring, such as safe routes for children to walk to school, improved rural and urban bus services and world class cycling facilities funded by cuts to the road building budget.

Friends of the Earth's director Tony Juniper said:

"Alistair Darling must put tackling climate change at the heart of the Pre Budget Report and show the electorate that a Brown Government is serious about tackling global warming. The Chancellor must make it easier and cheaper for householders and motorists to reduce their carbon footprints. Carbon dioxide emissions have risen under Labour. It's time to match the rhetoric with action, and make the UK a world leader in developing a low carbon economy."

Labour's record on tackling climate change is not very impressive to date [3]:

Despite repeated promises to tackle climate change, UK carbon dioxide emissions have actually risen under Labour. The latest Government figures estimate that carbon dioxide emissions in 2006 were over two per cent higher than 1997 [4].

Green taxation has fallen under Labour, despite a pledge in 1997 to shift the burden of taxation from employment and onto environmental pollution. In the eight years before Labour came to power green taxes (as a percentage of overall taxes) rose from 7.8 to 9.4 per cent. But by 2005 (the latest year for which information is available) Gordon Brown had let this percentage fall to 7.7 per cent. But there was a change of direction in Gordon Brown final Budget when he acted positively by raising green taxes across the board. The new Chancellor must ensure that this trend continues.

However, Labour has agreed to introduce a new law to cut UK carbon dioxide emissions. Friends of the Earth, which has led the campaign for a new climate change law through The Big Ask climate campaign, has welcomed the commitment, but says that the climate change law must be far tougher than currently proposed [5].

Friends of the Earth will be monitoring the environmental pledges of the main political parties during the run-up to the general election.

Notes

1. www.labour.org.uk/conference/brown_speech

2. Friends of the Earth is calling on the Chancellor to introduce the following measures:

Measures to make it cheaper and easier for people go green in their homes

£100 Council Tax rebates for people installing basic cost effective energy efficiency measures in their home.

First introduced in Braintree, Essex, this popular policy has had great success in increasing take-up of basic insulation measures (such as Cavity Wall Insulation), and should be funded and rolled-out nationally.
Stamp Duty rebates for people installing more expensive energy efficiency measures in their homes.

People are most likely to make big improvements to their home shortly after they have purchased them. Stamp Duty rebates to provide an incentive for homeowners to make big energy efficiency improvements would be politically popular and deliver large carbon savings. 58% of people support this and council tax rebates in a recent IPSOS MORI poll, with only 14% in opposition.
Increase grants for installing renewable technologies on hospitals, schools and on people's homes.

Renewable technologies like solar water heaters are increasingly popular, but people struggle with up-front costs. The Low Carbon Buildings Programme has been so popular with helping with these costs that it ran out of funds. This programme should be boosted with a £1 billion a year investment.
A guaranteed premium price for renewable electricity generated from homes and sold to the grid (Feed-in tariff)

In many European countries, people are guaranteed a good price for the renewable energy that they sell in to the grid through feed-in-tariffs. This omission in the UK is unfair, and is slowing the demand for these new technologies. The Chancellor should introduce a premium feed-in-tariff system to support smaller scale (eg domestic and community) renewable electricity generation.
Double funding for marine electricity technologies

Marine electricity technologies are a massive opportunity for the UK, particularly in Scotland. The Stern Review recommended a huge increase in deployment incentives for renewable technologies - doubling the Marine Renewables Fund, and reform of the criteria to access it, would be a big boost for UK industry and innovation, and enable more people to buy green electricity.
Increase funding for tackling fuel poverty

Many people still lack absolute basic insulation measures in their homes. This is a major problem for poorer and elderly people who are unable to afford to heat their home. The Government has a long-standing commitment to tackle fuel poverty, and needs to at least double the funds available in the Warm Front Programme.
A cut in VAT for refurbishing homes to high environmental standards'

Currently anyone refurbishing their home to higher environmental standards (such as making them more energy efficient by installing insulation) is charged the full 17.5% of VAT. But building a new home pays no VAT. The UK is allowed under EU rules to reduce VAT on refurbishment to 5%. The Chancellor should do this to help people with the costs of refurbishment to high environmental standards.

Measures to make it cheaper and easier for people go green in how they travel

Introduce a purchase tax on new gas guzzling cars, and cut tax for greener cars.

An Ipsos Mori poll from 1^st October 2007 found 64% of people supporting higher taxes on less efficient cars, and lower taxes for more efficient cars, with only 17% in opposition.
Commit to the fuel duty escalator beyond the next three years, with the money used to make cuts in other taxes such as National Insurance and investment in public transport.

The fuel duty escalator is needed to keep carbon emissions down in the transport sector. Higher taxes on environmentally damaging activities matched with tax cuts elsewhere was supported by 62% of people, and opposed by just 10% of people in a recent Ipsos mori Poll.
Reform taxation of aviation

Air Passenger Duty should be replaced by a tax on the carbon emissions from aircraft, extended to freight as well as just passenger flights. This would increase the incentive for airline operators to replace dirty, old planes. The policy would also be used to ensure that the cost of flying increases, with tax rises used to cut other taxes, such as on employment.
Introduce a £1billion a year Carbon Reduction Fund, to invest in greener alternatives to motoring, funded by cuts to the road building budget.

This fund could be used, for example to ensure that that every school-child is able to get to school safely on foot, bike or by bus - improving children's health, safety and reduce peak time congestion by tackling the school run. Funds could also be used to improve rural public transport services, etc. These investments would be funded by cuts in the road building budget. Road building is an increasingly expensive and ineffective method of cutting congestion, and does massive environmental damage. These funds would be far better spent ensuring all people have decent transport options.

3. www.foe.co.uk/resource/press_releases/blairs_green_record_10052007.html

5. Friends of the Earth has led the campaign for a new Climate Change Bill through The Big Ask climate campaign (www.thebigask.com).

A new law to cut UK carbon dioxide emissions is supported by all the main political parties, including the Government which has agreed to introduce legislation later this year. Friends of the Earth is delighted the Government has agreed to introduce a Climate Change Bill, but says that it must be stronger if it is to be effective. The new law should:

Ensure that UK carbon dioxide emissions are cut by an average of at least three per cent every year;
Include international aviation & shipping emissions
Establish a tough independent body to set future targets and demand action when targets slip;
Require an annual progress report to Parliament, with a debate, led by the Prime Minister.

If you are a journalist seeking press information please contact the Friends of the Earth media team on 020 7566 1649.

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Archived press release

Pre-Budget Report a key test of Brown's green credentials

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