Autumn Budget 2017: Environmental Focus

Authors

Harry Holmes and Lucy Fellingham

Recently Phillip Hammond the Chancellor released the UK Autumn Budget, the outline of the government’s spending plan. As ever, the green agenda didn’t register as high as the NHS and housing, but that doesn’t mean there is nothing to talk about. So, without further ado, let’s look at the environmental side of the budget document.

Transport: A Mixed Road

Let’s begin with the parts of the budget that will likely have a negative impact on the fight to tackle transport emissions, the first concern being the continued insistence by the government to freeze taxes on polluting transport. Fuel duty has been frozen, for the eighth year in a row, meaning more savings for drivers, meaning no incentive to reduce carbon emissions from cars. For 13.95% of air passengers there will be no increase in Air Passenger Duty, not as bad as the situation for cars, but still not satisfactory. In relation to VED (the charge on buying cars themselves, not the fuel for them) there is a freeze for trucks and other Heavy Goods Vehicles from 2018. Alongside this support for high emission transport there is also the increased investment in road building, including the dreaded expressway road between Oxford and Cambridge.

However, there were some silver linings on the transport front. There will be an increase in Air Passenger Duty for premium fares on long-flights and on private jets, so there is at least some attempt to reduce air travel. There is also an increase in funding for public transport, £1.7bn being given towards English Cities to improve their infrastructure, as well as £337 million to acquire a new fleet of trains for the Tyne & Wear Metro. Electric Cars seemed to be the main focus of the Chancellor, with an extra £100m being allocated to help people buy them and develop the technology, as well as a promise to ensure houses are built capable of having charging points installed.

The main victory in relation to transport is on the subject of clean air. There is a £220m Clean Air Fund for local areas with high levels of air pollution, allowing the money to be used to subsidise public transport infrastructure and efficiency technologies. The money will come from a rise of Vehicle Excise Duty on diesel cars, which are one of the main contributors to the decline in air quality. Whether this money will be enough to tackle the issue is yet to be seen.

Energy: A Disappointing Result

There are continued frustrations in relation to low carbon energy and fuel policy. Firstly, the government has reasserted that it does not plan to levy new low carbon technologies, meaning no new subsidies for the solar and wind sector. Subsequently, this means that large tidal and nuclear projects will now have to go ahead without government support. The government expects this situation to continue until the market pricing changes sufficiently, which they estimate won’t be until at least 2025.
But this lack of support for renewables can’t be said to extend to fossil fuels. The new “transferable tax history”, allows the costs of decommissioning old North Sea oil and gas projects to be set off which, in the government’s own words, “will encourage new entrant and fresh investment for a basin that still holds up to 20 billion barrels of oil”. So it seems the government plans continued extraction of fossil fuels, in addition to a lack of support for renewables.

Waste: The Plastic Problem

The government, after citing the success of the plastic bag charge, has said it is going to hold a review on single use plastics. The policies that may result from the consultation are uncertain, with minimal indication given in the budget. So we can possibly see the start of similar charges on other disposable plastics, or some other policy, or no response at all.

Housing: The Building Gap

Nothing was said about making housing energy efficient. Notably, there was no reference to the fact that there is still the need to retrofit buildings to reduce emissions. Being a large proportion of our emissions, the housing crisis seems to have influenced the budget to a larger degree, with most policies focused on new housing. There is also the intention expressed in the budget to build new “garden cities”, the environmental impact of which may be quite substantial. The Chancellor missed a clear opportunity to reduce UK emissions it seems.

All the Rest

The other things announced in the budget include an assertion that the current carbon price will remain at the rate it is, which is another disappointment. However, in lighter news, there were renewed commitments to increase investment in flood and coastal defences.

To summarise, the government has made some positive commitments to tackling climate change, but with some notable absences as well as clear environmental blunders. The document does not make for rosy reading.

Glossary of terms and concepts

• APD (Air Passenger Duty): A tax charged by the government on the use of aeroplanes.
• Carbon price: The value in tax of one tonne of Carbon Dioxide polluted.
• Entrant: A new company attempting to compete against established companies.
• Fuel Duty: A tax on the purchase of fuel.
• Retrofit: to furnish with new or modified parts or equipment not available or considered necessary at the time of manufacture
• Transferable tax history: A method to reduce tax on transferred oil and gas machinery proposed by the government.
•  VED (Vehicle Excise Duty): A tax on the use of a vehicle.