Wednesday, April 22, 2009

The Budget: this Green is underwhelmed

No comments:
Greens have been calling for significant investment in the green economy, action on poverty and inequality, a real attempt to sort out the debt ridden money system, a switch to eco-taxation...and are distinctly underwhelmed by the budget - it's a massive missed opportunity. Alistair Darling failed to produce a budget that will address entwined economic and environmental problems thus missing out on massive job creation in emerging industries (see Green New Deal). Failing to invest properly in: energy efficiency; solar energy; wind and biomass energy; upgrading the electricity grid; in rail and bus travel; and in new skills training will cost us dear economically, socially, and environmentally.

A year ago borrowing this year was supposed to be £38 billion but by the autumn it was £118 billion, and today £175 billion is needed. The Chancellor persists with the same economic goals as before. The unprecedented borrowing figures illustrate well the folly of building public finances that rely on growth. We need to replace growth at any cost as the primary goal with stability, security and sustainability (more).

Previous posts illustrate how we already seriously lag behind other countries in the "greenness" of our green stimulus plan (if indeed it merits this description at all). We need a stimulus orders of magnitude higher than we have or we will never meet tough emissions targets or maximise job creation potential. The Government proposes £1bn on climate change including £435m for energy efficiency, £525m on offshore wind - far too little and needs to build up to be 10 to 15 times as much.

The Government trumpetted its budgeting of carbon emissions. Greens produced a carbon budget two years ago! 10% annual cuts are what the evidence says we need, not 1-2%. Money for carbon capture and storage demonstration projects is putting money into an untried technology which if it can prove itself is likely to arrive too late. Good sense tells us we need things that are tried and tested now, like insulation, wind, solar (more here). Government incentives to get more oil from the North Sea announced in the budget are bizarre when we want to cut carbon!!

The Government's own sustainability advisors, the Sustainable Development Commission, proposed a £30bn investment package very similar to the Green Party's Budget proposals (see yesterday's post for details of various recent Sustainable Development Commission reports). They calculated that this would create 800,000 jobs.

The budget outlined a £2000 subsidy for a new car if a car over ten years old is scrapped. This doesn’t actually help the environment or job creation that much, given the carbon cost of manufacturing the car. Ideally we'd build cars to last longer - designing them to be refitted and improved over time would reduce the associated energy and significantly increase the amount of labour involved, by comparison with new manufacture. The budget proposal will create relatively few jobs and a far cheaper and more effective way to cut carbon and help everyone is to invest properly in rail and bus travel and in promoting car clubs (more on transport here).

The budegt often simply did not go far enough. It included £1.7Bn extra help for jobseekers, but only £250m for training. Help with finding a job is no good if there are no jobs to find. Training though is a productive activity for anyone, especially unemployed people when jobs are short. £500m was allocated on new homes - not enough. Only £100m on council houses.

Darling announced a cut in public sector pensions. Average public sector pension is only £3000, reflecting poor pay. Greens want to see better pensions for all, and the foundation is a better state pension which should be set at £165 a week in the party's view.

Higher rate tax relief on pensions removed for those above £150,000 is a welcome development as it matches current Green policy. Introducing a 50% tax rate for incomes above £150,000 is also welcome but I'd only consider this a start - we really need to go much further, bring in genuine eco-taxation, introduce further tax bands on the super-wealthy and take low earners out of tax altogether.