Budget 2021: A small shuffle in the right direction
The 2021 Budget was awash with references to the green economy, carbon and building back better. But did it actually deliver?
Chancellor Rishi Sunak today (3 March 2020) set out the government’s annual ‘Budget’, promising to steer the UK through the remaining difficult phases of the pandemic and beyond.
Set against a backdrop of record short-term government spending as well as increasing public anxiety around the longer-term recovery, the budget was split in to three parts.
The first on ‘protecting the livelihoods of the British people’ concentrated on the various personal and business tax cuts and grants launched since the onset of the pandemic, confirming that most would continue in the short term. The second covered the government’s desire of ‘fixing the public finances’, primarily by freezing various tax thresholds and increasing corporation tax.
It was the third section concerning ‘the foundation of our future economy’ on which the hopes of environmentalists and green groups therefore rested.
Budget 2021 green announcements
The Chancellor made numerous commitments to ‘green growth’, with the main concrete announcements as follows:
A new UK infrastructure bank to be located in Leeds to ‘finance the green industrial revolution’. The bank will be capitalised with £12bn when launched this spring, and it is hoped that it will support £40bn worth of infrastructure projects in total.
New port infrastructure for the next generation of offshore wind projects in Teeside and Humberside.
A new retail savings product (likely to be an ISA-style savings account) through which savers’ cash will be used to support green projects.
The formation of a new expert group to position city of London as global leader for voluntary carbon offset markets.
An updated policy remit for Bank of England, committing it to focussing on environmental sustainability and the transition to net zero alongside its core economic stability objectives.
While the above measures are undoubtedly positive, at this stage they largely lack clarity and may fall short of the ambition many will have been hoping for.
The statement overall did not seek to directly underpin the government’s recent ten point environmental plan, with no mention of several of its key themes, such as the need for a switch to zero emissions vehicles and greener buildings.
While the Budget heavily acknowledged the need to build back greener, it might best be described as a shuffle – rather than a step – in the right direction for the green agenda.
The hope will be that its shortcomings will be made up for elsewhere in the near future, such as through the government’s eagerly awaited Net Zero Strategy and Heat Policy Roadmap.
The timings are particularly urgent given the upcoming COP26 conference due to be hosted by the UK in November... time to get running!