The chancellor Jeremy Hunt has made much of how green his budget is. He must be colour blind. He has actually spent a great deal of money extending subsidies to encourage the use of fossil fuels and then made a whole series of wrong choices about what to invest in. Those failures were then compounded by largely ignoring serious opportunities to make progress.
Energy price subsidy rewards the wealthiest
One of the biggest decisions he made was to extend the energy price subsidy. This measure has been widely applauded because everyone knows that people are struggling to pay their fuel bills. In reality it is one of the worst targeted measures ever devised by any government and utterly wasteful of scarce public resources.
The way the energy price subsidy works is to cut the wholesale cost of power so that consumers get lower bills. That means that those who use more power get bigger subsidies. If you are living on the breadline and can only rarely afford to top up your pre-pay meter then you will have got very little help from the government and that will continue. If you happen to be the owner of a very large mansion with a heated swimming pool then you did very well indeed.
Rishi Sunak with several large mansions is one of the key beneficiaries. The environment wasn’t as it significantly reduces the incentive for the richest in society to take action to cut their consumption.
No rise in fuel duty – further subsidy for fossil fuels
When it comes to putting petrol and diesel into a car the chancellor made another major change which will have a direct negative impact on the environment. Fuel duty was due to rise in line with inflation. He decided to remove that rise, continue the 5 pence per litre cut for another year and reduce the duty on aviation fuel by 5%. That also encourages the consumption of fossil fuels.
Some will argue that these were necessary moves to help hard-pressed working people to cope with rising costs. If that was the intention then there were many better ways to do this. The money could have been targeted at the poor with rises in benefits like Universal Credit. Instead of a progressive tax and subsidy scheme designed to help the most needy we got a regressive subsidy for fossil fuels that helped the wealthiest to consume more.
There will, of course, be many small businesses who see help to fill up their vehicle as a real benefit. Plenty of alternative ways to support those businesses exist such as measures to provide a level playing field on council taxes which still leave Amazon paying lower rates of tax than a corner shop.
Measures could also have been taken to tax the huge profits of suppliers who failed to pass on price reductions quickly but took full advantage when prices were rising and that would have created huge headroom to provide more support for struggling local businesses like pubs.
Cutting environmental red tape to enable freeports
When it came to investment the chancellor’s moves were equally wrongheaded if the intention was to help the environment. He acted on the daft right-wing theory that the reason for low investment in Britain is that we have had strong environmental controls. His investment zones therefore come with much nonsense about benefiting from Brexit and cutting bureaucracy to stop holding back business.
Curiously German industry has prospered whilst maintaining strong environmental controls, proper workers’ rights and membership of the EU. Equally curiously in the investment zones that have already been created rushed and badly regulated development is causing major problems that are killing off jobs. The dredging for development in the Teesside ‘freeport’ has caused releases of pyridine which has killed off much sea life along the north Yorkshire coast and cost jobs in fishing and tourism.
Bold claims on carbon capture and nuclear energy
The chancellor made some bold claims about the benefits of carbon capture schemes. Cutting down forests, shipping them across the world, transporting them to Drax and then burning them is a strange way to reduce C02 generation. Carbon capture isn’t an excuse for doing the wrong thing. It is a desperate last resort when all other solutions have failed and is frequently used as a way of greenwashing dirty business practices.
He also made some bold claims about nuclear being green that are just outright wrong. It takes enormous amounts of CO2 to build the costly large scale nuclear reactors that supply overpriced energy. The environmental and financial costs of the clean up after the reactor is closed have never been properly costed against any nuclear project and those costs will fall on the community. Massive vanity projects such as a huge new nuclear facility create the potential for shoddy work and cut corners as subcontractors’ profit and costs escalate. It only takes one of those poorly monitored contractors to make a big mistake for things to go very badly wrong.
The idea that these problems can be solved by reducing the scale of the nuclear reactors and increasing the number of them is also not to be trusted. Building more nuclear reactors but smaller simply spreads an unacceptable risk wider and doesn’t solve the overpricing problem.
A litany of missed opportunities
All of which leads to the question of what else could have been prioritised. The list of missed opportunities is enormous.
Support for better insulation and refurbishment of existing properties in UK remains weak and badly co-ordinated. Investing in that is simplest ways to cut bills. Where was the money to let every school in the country put solar panels on its roof or to help hospitals to cut their energy consumption?
Public transport in Britain remains underfunded, overpriced and chaotically organised. No sustainable long term support was provided to get a decent network of rural bus services in place. The north remains without a coherent public transport system equivalent to London Transport. Any support that was given towards developing a better network of electric charging points or to encourage hydrogen fuelled transport technology pales into significance when weighed against the lost opportunity to make public transport the best choice on more occasions.
In short this budget was a complete failure in its claimed achievement of making Britain greener. In the interests of fairness and balance it is however only right to accept that it did succeed in one of its intentions. It helped the rich more than the poor.
This wasn’t the greenest budget ever. It was the bluest.
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