Written evidence submitted by Friends
of the Earth England, Wales and Northern Ireland|
1. Less than a month ago the Government issued
a challengethat the nation must wean itself off oil. In
that light, this Budget was exceptionally disappointing. The UK's
oil addiction is an ever-increasing economic liabilityit
is dangerously negligent of the Treasury to keep choosing to ignore
2. The Budget was also a huge economic opportunity
blowndamaging the potential for new jobs and the UK's economic
recovery by hobbling some of the country's fastest growing sectors.
The Green Investment Bank has been hamstrungit cannot borrow
for at least five years. The low carbon homes sector has been
damaged, to go with the Treasury's earlier actions to hold back
the growing UK solar industry. Planning changes are a deeply retrograde
step, at odds with the Government's climate change goals. They
also conflict with the Government's Localism agenda because they
threaten even less involvement for people in decisions that affect
3. The Treasury's Budget actions are in deep
opposition to the Prime Minister's promise to make this the Greenest
4. The main green announcements were:
4.1 The new Green Investment Bank will not
have borrowing powers until 2015-16 at the very earliest.
The ability to borrow is the core of a successful bank, as Mr
Cameron and Mr Huhne have both made clear. The Bank has been hamstrung.
4.2 Ripped up planning-controls. The Budget
is attempting to redefine "sustainable development"
to mean "yes to everything", in direct conflict with
Mr Cameron's (correct) contention that the type of growth
matters. If successful this will mean a development free-for-all,
which local authorities and people will have almost no means to
stop or improve. And it will concentrate development in the already
over-heated South-East region. Local people will have less say
in what happens in their area, in direct conflict with the Government's
4.3 Increased oil-dependence. The Chancellor
found £10 billion extra over five years by increasing taxes
on North Sea Oil profits, but spent it all on cutting fuel duty
and none of it on measures to cut our dependence on oil.
4.4 Weak carbon price mechanism. The Budget
introduced a new tax to underpin the failing EUETS scheme, but
it will be set way below the figure needed to influence investment
decisions. It gives an extra subsidy to the nuclear industry and
increases electricity billswith no promise that any of
the revenue will be used to help people save energy at home.
4.5 Inaction on aviation, yet another
consultation and more buck-passingblaming international
4.6 No help on energy efficiency for the cold
homes of the 4.5 million households suffering from fuel poverty.
Buried in small print, pensioners will lose £50-£100
winter fuel allowance. Zero-carbon new homes standard watered
5. In late 2009 George Osborne promised "Under
a Conservative government, the Treasury will no longer be the
cuckoo in the Whitehall nest when it comes to climate change.
If I become Chancellor, the Treasury will become a green ally,
not a foe".i But the Treasury is a bigger cuckoo
than everthis is increasingly economic as well as environmental
6. What was announced: Planned fuel duty
increase postponed until next year; fuel duty cut by 1p / litre.
The five year cost of this measure is £10 billion, paid for
by increasing taxes on the profits of North Sea oil and gas production.ii
Future rises in fuel duty will be in line with inflation. The
increased tax on production will be removed if oil prices fall
below a "trigger" level, tentatively set at $75 per
7. The Government said earlier this month that
it wanted to get the UK "off the oil hook". From nowhere,
the Chancellor found £10 billion over the next five years
by increasing charges on the profits on UK oil and gas production.
But every penny of this has gone to cut fuel dutya move
which increases the UK's dependence on oil. None of it was spent
on giving people and businesses better alternatives to using cars
and vans, or improving the efficiency of vehicles.
8. Even just a fraction of that £10 billion
could have made a real difference to improving alternatives to
9. £500 million would have doubled the new
Local Sustainable Transport Fund, which provides sorely needed
funds to cash-strapped councils to cut carbon from transport in
10. £300 million would reverse the cuts
to public subsidy of buses which were announced in the CSR (the
Bus Operators Subsidy Grant, BSOG)a move which will increase
bus fuel duty by 8p in 2012;
11. £300 million would ensure the construction
of the long-planned electric trolley bus network in Leeds, which
has been under threat since the Comprehensive Spending Review.
12. High and increasing global oil prices are
set to continue to be a fact of life. The UK desperately needs
a strategy to overcome its ever-increasing dependence on imported
fossil fuels, yet there was nothing in this Budget to help people
or businesses use less petrol. The Chancellor's actions are actively
subsidising our oil addiction and making it more expensive for
people to choose less oil-dependent options.
13. GREEN INVESTMENT
14. What was announced: Initial funding
for the GIB increased from £1 billion to £3 billion.
But the GIB will only be able to borrow in 2015-16 at the very
earliesta critical function for any bankand only
then if the Chancellor has eliminated the annual structural deficit.
15. The extra £2 billion in initial funding
for the GIBup to £3 billion in totalis still
short of the £4-6 billion Ernst and Young say the GIB needs,iv
but nonetheless represents a significant improvement.
16. But the decision to prevent the Bank from
borrowing until 2015-16 at the earliest is a huge own goalan
economically-damaging delaying tactic from a Treasury determined
not to cede any of its power. The ability to borrow is the most
critical aspect of the GIBit's the key mechanism to leverage
in the billions of pounds of essential private investment.
17. Even in 2015-16, it is very far from certain
that the GIB will actually be able to borrow: a condition imposed
is that it can only borrow "once the target for debt to
be falling as a percentage of GDP has been met". The
Chancellor's ambitious growth forecasts allow him to suggest that
this will happen in 2015-16but after the Budget leading
economists, including the Governor of the Bank of England, lined
up to attack these forecasts as very ambitious.v The
CBI said the Bank "should have powers to borrow from the
outset to give investors confidence". Institutional investors
the UKSIF, representing assets of over £500 billion, said
linking the Bank's borrowing to progress on the deficit "does
not give investors the certainty they need".vi
18. The increased funding secured for the Bank
represents a victory for the more progressive elements in Government,
but they need to overcome Treasury resistance to the key issue
of borrowing for the Bank to be effectivethe 2015 date
must be brought forward, and the condition that the deficit must
be eliminated first must be dropped. After all, a fully functioning
bank will be a critical element in helping Britain's economic
recoveryrather than something that must wait until the
economy is on track.
19. CARBON FLOOR
20. What was announced: a carbon floor
price of £16/tonne will start in 2013, rising to £30/tonne
in 2020. The floor price will underpin the price of permits in
the EU Emissions Trading Scheme
21. This carbon floor price is set too low to
have a meaningful effect on investment decisions. The Government's
own modelling looked at a £50 price for 2020. As set up,
the policy provides a windfall for existing nuclear power stations
of at least £1.8 billion between 2013 and 2026.vii
It's inappropriate for a well-established industry to get yet
another major subsidy.
22. The Treasury expect the floor price to raise
£1.6 billion a year by 2015-16. As this will get passed onto
bills, this revenue should be used to help people insulate their
homes. At present, this extra cash goes straight to Treasury coffers.
23. AIR PASSENGER
24. What was announced: Abandonment of
commitment to tax per plane, rather than per passenger as at present.
APD frozen for 2011-12, with inflation price increase delayed
until next year. Commitment to launch consultation on reform of
25. The Government cites prohibitions in international
law for why it has had to backtrack on its plans to bring in a
per-plane tax, which could have netted the Exchequer an extra
£3 billionbut experts expressed surprise at the sudden
change of policy and called on the Government to test this presumption
in law later this year.viii This and the postponement
of planned rises are bad for the economy and environment. Tax
rises could have been used to fund tax cuts elsewhere, or prevent
cuts to public services.
26. Aviation remains massively under-taxedit
pays no VAT on any of its activities, and no duty on kerosene.
The postponement of the planned inflationary rise means air taxes
will actually fall in real terms, and operators will continue
to have no incentive to fill planes more efficiently. Freight
continues to pay no APD, and there is no distinction between the
payments made by the least and most polluting aircraft. The decision
to make private jets pay APD is a tiny loophole closed, but makes
very little differencethese flights are a negligible proportion
of the total.
27. ENERGY EFFICIENCY
28. What was announced: almost nothing
positive, despite outrage over surging energy bills. The Chancellor
committed to introduce incentives to encourage takeup of its impending
Green Deal scheme for energy efficiency improvements in homes
and businesses. The much-lauded policy commitment for all homes
to be zero carbon by 2016 was abandoned, to outrage from the industry.
29. Tucked away in the small print of the Budget
was a very nasty surprise: the Government quietly walking away
from its much trumpeted policy that all new homes must be zero
carbon by 2016.ix This means that in practice new homes
will only need to be about two-thirds zero carbon. This represents
a shocking u-turn from a Government who earlier this month were
still trumpeting their commitment to the policy. The UK's low-carbon
building industry, which has flourished in readiness for the 2016
target, reacted furiously to this unheralded announcement.x
30. The Chancellor conceded that he would need
to offer financial incentives to encourage people to take up the
Green Deal, although he did not go into any further detail. This
is broadly welcome: incentives will indeed be hugely importantboth
"carrots" (financial incentives) and "sticks"
(legislation for future minimum standards
on energy efficiency). Financial incentives could take the form
of a council tax rebate or money off stamp duty and would make
a significant difference to the attractiveness of the Green Deal
to consumersas called for by a broad coalition of NGOs
31. It is however important to be clear that
from what we know about the Green Deal it seems unlikely that
it will live up to the bolder claims Government has made for it.
It won't deliver whole-house retrofits, won't work for many millions
of fuel-poor households, and is no substitute for a comprehensive
strategyif made to work as well as it can, the Green Deal
could have a sizeable role to play in cutting carbon from some
of the UK's homes. But it cannot and must not be the only show
32. For a Budget that claimed to be helping people
deal with soaring every day prices, there was nothing else which
will help people with the struggle of heating their homes adequately.
33. The Government is still committed to axing
public grants for energy efficiency in the poorest households
by phasing out the Warm Front scheme, a decision which this Budget
should have reversed.
34. The Chancellor has also cut the Winter Fuel
Payment for pensioners£100 less for people over 80,
£50 less for people over 60. This payment was introduced
in 2008 to help pensioners cope with rising energy bills.xii
These bills have risen since then.
36. What was announced. A "powerful new
presumption in favour of sustainable development, so that the
default answer to development is 'yes'".
37. The Government has announced changes to planning
policy through a Ministerial Statement on 23 March 2011 and a
letter to Chief Planning Officers on the 31 March 2011.xiii
The Letter to Chief Planning Officers sets out that planning is
to support sustainable development, but the Ministerial statement
sets out a pro-growth agenda. The Government is attempting to
give growth priority over other issues but this is problematic
in planning law. What is of more concern, is the Government's
deliberate undermining of the term sustainable development as
defined internationally by Brundtland,xiv and by the
UK Sustainable Development Strategy's five principles, agreed
by the UK Government, Scottish Executive, Welsh Assembly Government
and the Northern Ireland Administration in 2005. The Government's
announcements on sustainable development consistently attempt
to redefine sustainable development, creating inconsistency, and
moving away from the international definition.
38. The Government's sustainable development
strategyxv is clear that economic, social and environmental
goals should be met togetherthe types and location of economic
activity matter. David Cameron has said as recently as November
2010xvi that the type of economic activity is critical
and that the wrong types of growth can make our society worse
off. Greg Clark's ministerial statement says: "The Government's
top priority in reforming the planning system is to promote sustainable
economic growth and jobs." The obvious confusion around sustainable
development is maintained further by the following sentence: "When
deciding whether to grant planning permission, local planning
authorities should support enterprise and facilitate housing,
economic and other forms of sustainable development." Further
attempts at prioritisation are also made "They [local planning
authorities] should ensure that they give appropriate weight to
the need to support economic recovery, that applications that
secure sustainable growth are treated favourably." The obvious
result is that local authorities will feel unable to demand better-quality,
more sustainable developments in appropriate locations which benefit
the community and environment as a whole.
39. In planning terms, sustainable development
is still defined in PPS1 Sustainable Development, and will only
be replaced after the National Planning Policy Framework is published
for consultation, expected to be early July 2011. If it this is
written as the Treasury intendsto be simply a "pro-growth"
policyit will lead to a free-for-all with poor quality,
inappropriate developments that increase the UK's contribution
to climate change, deepen the UK's dependence on fossil fuels,
and impact severely on people's quality of life. The Government
have refused to put an agreed definition of sustainable development
on the face of the Localism Bill (Public Bill Committee, Greg
Clark, 15 February 2011),xvii suggesting that this
will be the case.
41. Promoting economic development above other
considerations will result in a development free-for-all, which
local authorities and people will have almost no means to stop
or improve. And it will concentrate development in the already
over-heated South-East region. Local people will have less say
in what happens in their area, in direct conflict with the Government's
42. Planning is then the main tool to ensure
we get the right types of development in the right places: this
is not bureaucracy or red-tape, as the Communities and Local Government
Secretary Eric Pickles caricatures it, but essential. If
new housing development is granted without proper planning and
new communities spring up without linked services, there could
be extreme pressure on schools, hospitals, doctor's services and
public transport in the area. Without a decent planning system,
essential services will get stretched, Britain's roads will get
ever more choked, and our climate change problems will get worse.
43. The Budget's proposals are an attempt to
tear up this strategy, and cripple the planning system's effectiveness.
Mr Osborne, Mr Pickles and planning minister Greg Clark have said
that the prime purpose of planning should be to "prioritise
growth" and that the new NPPF will be "inherently pro-growth".
44. Friends of the Earth is not anti-growth,
but the type of growth is critical. A presumption in favour
of developments whatever their type will make it much harder to
ensure that Britain gets the right type of economic developments,
in the right places. Unfortunately it seems that all that matters
to Mr Osborne and Pickles is that we get growth, whatever its
type or impact.
45. The following additional announcements on
planning also damage the Government's own localism agendalocal
authorities and people will have a vastly reduced ability to have
any say over what gets built in their area:
46. What was announced: The creation of
21 new Enterprise Zones across the country, which will use local
development orders to bypass planning application processes;
47. The creation of Enterprise Zones which bypass
the planning system are of major concern. The lack of an accountable
process for designating and locating the zones risks public legitimacy
and prioritises developers above the needs of society, the economy
and the environment as a whole. If the zones use local development
orders (introduced in the Planning and Compulsory Purchase Act
2004), then the local planning authorities will retain some control.
However, planning permission will be dropped within the order
area for certain types of development. If these orders are weak,
they will not promote integrated sustainable development that
delivers positive outcomes for the environment, economy and society
together. Environmental standards and social needs are not necessarily
met by developers without the appropriate controls or incentives.
The orders also summarily remove public involvement in local environmental
decision-making within that area, by removing the planning application
48. What was announced: Relaxing change
of use controls eg converting commercial properties into private
49. Relaxing change of use controls could lower
the quality of the local environment, as depending on the location
and type of building these may be totally unsuited to other uses,
or located without the necessary infrastructure.
50. What was announced: Removing brown-field
51. Removing the brownfield targets through the
National Planning Policy Framework weakens the sequential test
which has been influential in northern parts of England to ensure
that development re-uses previously developed land, as a part
of regeneration strategies.
52. What was announced: Introduction of
Neighbourhood Development Orders through the Localism Bill;
53. The introduction of neighbourhood development
orders is the most radical aspect of the Localism Bill in relation
to sustainable development. The Government has suggested that
these orders will be made available to "neighbourhoods"
covering eg a local industrial estate, and could be granted (if
in conformity with the local plan) for up to five years, removing
planning permission controls in that area. As only 22% of England
currently has adopted core strategies, the concern is what happens
where there is no adopted core strategy.
55. What was announced: Nothing. With
the Government's Waste Review due for publication in May this
Budget was an opportunity to foreshadow genuine commitment towards
a zero waste economy. Instead actions on waste and resource efficiency
were absent. The Government could have extended landfill tax to
all residual waste treatment including and especially incineration.
And with Defra only last week estimating "no cost/low cost
savings" opportunity for business of £23 billion the
lack of support for resource efficiency to SMEs in particular
is as much economic as environmental negligence.
iv Ernst & Young,
"Capitalising the Green Investment Bank" (2010): http://bit.ly/eUYJdm
vii WWF and Greenpeace
modelling using Redpoint data for the Government.
http://cdn.hm-treasury.gov.uk/2011budget_growth.pdf, section 2.296,
xiv World Commission
on Environment and Development, 1987, "development that meets
the needs of the present without compromising the ability of future
generations to meet their own needs."
xvii 15/02/2011, Public
Bill Committee Localism Bill, Hansard Col 601, Greg Clark, Minister:
"There is a clear suggestion that we should put sustainable
development and its definition in the Bill. I have no objection
in principle, although I am not persuaded that it would prove
to be inimical to our joint purposes, but I will approach the
matter with an open mind. If it seems possible to capture the
suggestion in a way that does not preclude sustainability from
having a major role to play, I will certainly do that."
14 April 2011