Rishi Sunak’s spring statement did not have much support for environmentally friendly policies. Although there was a reduction in VAT on items such as solar panels and heat pumps, there were also environmentally regressive policies such as reducing the cost of petrol.
Here are five policies Sunak could have introduced to make his spring statement more environmentally friendly.
Windfall tax
Oil and gas companies are enjoying a bonanza from prices that were already soaring in the recovery from the Covid-19 recession, now sent even higher by the war in Ukraine. The cost of extraction is the same, so the elevated price companies are getting for their products is pure profit. Even the normally conservative International Energy Agency has recommended the measure, and Labour estimates a windfall tax could bring in £3bn that could be recycled to reduce energy bills for hard-pressed households. But the chancellor has adamantly refused.
Public transport
After working from home in the pandemic, many people have returned to the office in their cars instead of braving public transport, and this habit seems to be sticking. But if the UK is to meet its carbon budgets, reducing stubbornly high emissions from cars will be essential. Making public transport cheaper or even free would serve several purposes: reducing the UK’s overall fuel use, which would bring down petrol costs for those still needing their cars; reducing greenhouse gas emissions; cutting air pollution; cutting the cost of living for the poorest, who are most reliant on public transport; and encouraging people to work from offices, which the government wants them to do.
Skills development
The fiasco of the green homes grant – the insulation programme introduced as a “build back greener” measure during the Covid pandemic and scrapped after six months – showed that the UK does not have enough trained installers of insulation and heat pumps. Building up those skills and investing in the skills needed for other green measures, from renewable energy to building more climate-resilient infrastructure, would benefit green jobs, help with levelling up and help households out of fuel poverty.
Green mortgages and financial incentives
VAT has been removed from solar panels and energy efficiency materials at last, and the government is planning grants of up to £5,000 for heat pump installations under its boiler upgrade programme from April. But there is much more that could be done to improve energy efficiency in the UK’s draughty homes, such as green mortgages that enable people to add the cost of upgrades to their mortgages at low interest rates, or under loans from the UK Infrastructure Bank that charged zero interest.
Infrastructure programmes
From creating new cycle routes and electric vehicle-charging networks in towns and cities, to tree-planting and building flood defences in rural areas, there are dozens of ways in which new infrastructure is needed to help the UK cut greenhouse gas emissions, and adapt to the impact of the climate crisis. Investment in this infrastructure would not only cut emissions but improve people’s health and wellbeing, and could create tens of thousands of new “shovel-ready” green jobs around the UK.
