This was not, overall, a good green Budget. The chancellor’s announcement on the Green Investment Bank attracted ire, because it will not be able to borrow significantly until 2015 at the earliest.
But what he said about the GIB was as good as could be hoped for, given the government’s unshakeable deficit-cutting priority. If all goes according to plan, the bank will be up and running in 2012 and be able to line up £18bn to back projects by 2015.
That’s enough to be getting on with for now. The GIB will be doing well if it identifies and secures that scale of finance for genuinely low-carbon infrastructure in a three-year period.
Both industry and green NGOs criticised the new carbon floor price, to be introduced in 2013, as more of a Treasury money grab than a genuine green measure. But it’s a move in the right direction. It does, however, need amending to prevent windfall profits accruing to existing nuclear and renewable generators.
The most nakedly populist part of the Budget concerned fuel duties, with Mr Osborne desperate to be seen as the motorist’s friend. But his fair fuel-stabiliser is not an anti-environmental move. It should keep pump prices relatively high.
His instant, 1p cut in fuel duty hardly touches the strong carbon-cutting incentive which petrol and diesel prices at around £1.40 a litre provides. And this unexpected tax cut is far outweighed by the recent VAT increase. The Budget’s stance on aviation taxation is bad news, overall, but at least the EU ETS is going to cover aviation very soon.
The most depressing part of the Budget concerns further reforms to England’s land-use planning system. It is a system which gives local councils, and local politicians, the chance to deliver sustainable development in their own patch.
By controlling what is built, and exactly where it is built, they are able to strike their own, local, balance between fostering economic growth, protecting the environment and achieving fairness and social justice. Often they got it wrong, but they had the chance to get it right – and they were locally accountable.
Through the Budget, the coalition is now making it clear that economic growth trumps everything else in planning. It sees the system’s main function as facilitating new development. The government intends to have a presumption in favour of sustainable development within the planning system, but it has yet to say what it thinks this actually means.
We are in danger of getting a planning system in which all new development is judged sustainable, so long as it avoids green belts, areas of outstanding natural beauty and designated nature conservation sites. And that would fail the environment badly.