Annex
SUMMARY OF PBR MEASURES
Friends of the Earth's critique of the Chancellor's
Pre Budget measures:
TRANSPORT
Fuel duty
The Chancellor announced an immediate rise in
duty of 1.25p, in line with inflation, but ruled out a real terms
increase and reinstating the fuel duty escalator.
The cost of motoring continues to fall, while
the costs of alternatives like bus and rail continues to rise.
The 1.25p rise—merely in line with inflation, ie real price
staying still—will have almost no effect. A real terms increase
would also have allowed investment of the funds raised into improving
public transport, as promised in his 1999 report, but there are
now no funds for this.
Vehicle Excise Duty
Nothing.
The Government accepts that varying the cost
of the tax disc by pollution levels has great potential to shift
buying habits towards greener cars. However the current £20
difference between F and G bands for example is no incentive at
all.
Air passenger duty
Rates have doubled—from £5 to £10
for intra-EU flights, and £20 to £40 for longer flights.
Business rates have also doubled from £10 to £20 (intra-EU),
and £40 to £80 (rest of the world).
Air Passenger Duty has been frozen (and falling
in real terms) since 2000. Today's announcement brings the £5
rate back to its 2000 level of £10. This increase is welcome
in that the Government has recognised that interim measures are
needed to tackle aviation's emissions while an international agreement
is negotiated. It is also welcome that the Government accepts
that APD rises will have an environmental effect, and that demand
management is necessary. However, the increases are not sufficient
to tackle aviation's emissions- larger increases are needed, and
an commitment to year on year increases to prevent the continuing
falls in the overall cost of flying. These falling costs are driving
massive airport expansion programmes across the UK.
Biofuels
The Chancellor announced a number of policies
designed to increase the support for and uptake of biofuels.
Biofuels could potentially have a part to play
in tackling climate change, but it is essential that there are
strong environmental and social criteria attached to new biofuels
projects, otherwise biofuels could encourage deforestation (monoculture
plantations replacing rainforests) threatening biodiversity and
adding to climate change. The Government's current sustainability
criteria are nowhere near strong enough, and it is a major concern
that it is helping this technology expand before ensuring high
quality standards are in place.
HOMES
Energy efficiency
No measures anything near the scale of the challenge
in the domestic sector. £7.5 million extra for better co-ordination
of the Warm Front and Energy Efficiency Commitment.
Almost no new measures here, despite it being
a huge source of emissions. Households need financial help with
capital costs for installing energy efficiency measures and new
technologies such as solar panels. This would save people money,
create jobs and reduce emissions. An investment of billions is
the order of change needed—to help millions of householders
improve the efficiency of their homes. Tiny micro-measures are
not what are required here.
Micro-generations
No increase in the Low Carbon Buildings Programme
(LCBP). No measures to ensure a fair price for power generated
and sold to the grid. The sale of power to the grid is now not
subject to income tax.
The income tax measure is welcome but small.
The overwhelming priority to get these technologies taken up is
help for householders with capital costs. The existing LCBP needs
to be massively boosted. Countries like Germany have a package
of strong measures to support micro-generation, and it is taking
off. The UK is already falling way behind in these future technologies.
New homes
All new homes to be zero-carbon by 2016.
This is welcome, but the date of 2016 is far
too unambitious. Also, a far greater priority is the existing
stock—each year new houses contribute just 1% to the overall
stock. The overwhelming priority is measures for 99% of houses
now, not 1% of houses in 10 years time.
Zero stamp duty on new zero-carbon homes.
This is a useful but minor measure.
Landfill tax
A £3 a year increase, in line with existing
policy of a £3 a year escalator. David Miliband has said
that a much higher escalator is needed to reduce landfill and
its adverse environmental impacts. A commitment to "consider"
steeper increases is not progress.
Climate Change Levy (CCL)
Nothing. Continuing with in-line with inflation
rise announced in Budget 2006.
The CCL has been a success, but frozen in recent
years. A real-terms increase would have helped businesses increase
efficiency, cut emissions and boosted the further uptake of renewable
energy.
Carbon capture and storage
The Government is going to subsidise a demonstration
plant.
Emissions trading
The Government continues to place great hope
in the EUETS scheme and its potential future expansion. The "protecting
the environment" chapter of the pre-budget report focuses
heavily on it. However it is not a panacea, and is working very
badly at the moment—for example the UK power generators
made £800 million windfall profits in the first year of its
operation. The Stern Report is clear that other mechanisms including
taxes, spending and regulation are all essential. It is also clear
that action at the UK level will be, with well designed packages
of policies, good for the economy as well as the environment.
There is not a penalty from unilateral action, and indeed we are
not moving faster than many countries in any case.
January 2007
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