In the midst of the coronavirus outbreak, last week Britain’s chancellor issued a new budget that promised a lot for infrastructure and, of course, to tackle the pandemic.
Chancellor Rishi Sunak promised to spend £640 billion (A$1280 billion) on infrastructure improvements over the next five years, a highly unusual commitment for a Conservative government new to power.
The chancellor announced “targeted and temporary measures” worth £12 billion (A$24 billion) – 1.3 per cent of GDP – to deliver support for the response to the pandemic, together with a further £18 billion (A$36 billion) to keep the economy afloat as stock markets tumble around the world and economic activity shrinks.
This figure includes £5 billion (A$10 billion) for the NHS and for local authorities to manage pressures on social care and to support vulnerable people.
Sunak pledged that public services will “receive the funding they need to respond to the outbreak as the situation develops”, but the government has so far shied off closing schools and borders, unlike other European countries.
Workers forced to take days off will get sick pay from day one rather than the fourth day as customary, although this doesn’t help people in the gig economy and the self-employed.
SMEs will also receive limited compensation for workers self-isolating and off sick.
Climate change budget?
Challenging assumptions that the pandemic would eat up most of the cash he had to give away, the rest of the chancellor’s speech was still a spending spree… but how green was it?
The Treasury’s “red book”, which puts meat on the bones of the chancellor’s speech, acknowledges that “the transition to a net-zero economy by 2050 will require radical changes in every sector”. It calls cutting carbon a “major government priority” and uses the phrase “net-zero” 17 times, and “climate” 31 times.
So, what does it promise?
Almost £11 billion (A$22 billion) has been allocated to tackle the lack of affordable housing – intended to unlock a further £38 billion (A$76 billion) in public and private investment – plus a £400 million (A$800 million) brownfield housing fund for local authorities to use to remediate polluted land for housing, and an extra £1 billion (A$2 billion) to remove unsafe cladding from residential blocks.
A Future Homes Standard is promised to reduce emissions from these houses but if it is anything like the recent consultation on changes to the building regulations, it is insufficient, in the eyes of the Green Building Council, for not taking a “fabric first” approach.
But there is a lack of detail on how the money will be spent, with the construction industry still experiencing sluggish growth and continued uncertainty following Brexit. “Radical action on supply-side measures is required” to stimulate demand, commented one construction firm’s CEO, Clive Docwra of McBains.
Prioritising higher and more dense housing developments was promised. A new law will be introduced to encourage councils to use new housing to kickstart regeneration of high streets rendered empty by the rise of online shopping, which will be supported by a £3.6 billion (A$7.2 billion) Towns Fund.
The law will also permit the addition of two storeys on existing buildings to increase the density of pre-existing residential areas and to take more advantage of empty brownfield sites.
A £10 billion (A$20 billion) Single Housing Infrastructure Fund will support the introduction of essential community infrastructure such as schools and doctors’ surgeries so they’re in place before people move into new homes.
Interest rates for public borrowing to invest in social housing is being cut by 1 percentage point, and an extra £1.15 billion (A$2.3 billion) of discounted loans made available for local infrastructure projects.
The aim is to increase housebuilding in and around urban areas to meet the government’s target of delivering 300,000 homes a year. No house building targets have been met for a decade.
Chartered surveyors membership organisation RICS welcomed these measures but said government should focus on “empowering local communities to identify local tenure, infrastructure and locational needs” too.
The government will publish a landmark National Infrastructure Strategy later in the spring.
On the transport front there will be £800 (A$1.6 billion) million to promote cycling and walking, but this is dwarfed by over £1 billion (A$2 billion) to deliver local public transport, including a cycling and walking bridge in Plymouth, upgrading the Tyne and Wear Metro and trams in Sheffield.
The chancellor pledged £4.2 billion (A$8.4 billion) in 2022-23 to link the transport networks of eight northern city regions in England.
But this itself is dwarfed by the controversial announcement that £27 billion (A$54 billion) will be splurged on road improvements – the largest ever investment in England’s strategic roads – which Sunak said would apply to “4000 miles of road”.
Some of the most visible of these will be a two-mile tunnel under the prehistoric Stonehenge monument, a Lower Thames Crossing and a dual carriageway across the peat-rich Pennine moors. Peat is a known store of atmospheric carbon.
Greenpeace called this “a road to hell” and said this colossal spend on roads means the Chancellor is “driving in the opposite direction” he needs to go to address the climate emergency.
Crispin Truman, chief executive of CPRE (formerly known as the Campaign to Protect Rural England), said this “will only serve to encourage more people into cars instead of using sustainable and reliable public transport, where significant investment is sorely needed”.
There’s also £500 million (A$1 billion) promised to increase electric car charging infrastructure and electric vehicle purchases. The plug-in car grant which helps people buy electric vehicles will be extended for another two years, although it’ll be cut from £5000 (A$10,000) to £3000 (A$6000).
After the recent disastrous flooding episodes there’s also a commitment to double spending on flood defence over the next five years to £5.2 billion (A$10.4 billion), but this is significantly less than the Environment Agency’s recommendations.
Because homes will need to be virtually zero carbon by 2050, it’s vital to replace natural gas and other fossil fuels for heating with low carbon alternatives such as biomethane, hydrogen, heat pumps and heat networks.
So the budget announces a new support scheme for biomethane, funded by a Green Gas Levy, and a Low Carbon Heat Support Scheme to support the installation of heat pumps and biomass boilers.
The Renewable Heat Incentive subsidy scheme will be extended for an extra year, until 31 March 2022. The government will consult on a new “low-carbon heat support scheme” to replace it from April 2022.
The existing Energy Innovation program will double in size to around £1 billion (A$2 billion) and a carbon capture and storage infrastructure fund will attempt to resuscitate this idea (which the coalition government killed off seven years ago because it was considered too expensive) and establish it in at least two UK sites, with a bolt-on system added to one power station by 2030.
A review of business rates was announced and welcomed by the Solar Trade Association because they are the “main barrier to the deployment of large rooftop PV”, and there’s currently no support whatsoever for solar electricity.
The existing carbon price support scheme will be frozen at £18 (A$36) tonne/CO2e.
A Nature for Climate Fund will invest £640 million (A$1.28 billion) in tree planting and peatland restoration in England, increasing the rate of tree planting by over 600 per cent and covering an area greater than Birmingham over the next five years. But this is significantly less than the Tories promised in their election manifesto and that advised by the Committee on Climate Change, which thinks that £500 million (A$1 billion) per year is needed to meet its tree-planting targets, as well as £200 million (A$400 million) for growing trees on farms.
Critics also pointed out that there was a shortage of qualified tree planters.
The Woodland Trust and the joint body representing The Wildlife Trusts across the nation welcomed the fund but said that more was needed to repair the damage done by long-term cuts to spending on environmental protection (down 34 per cent since 2013), and that “the government must ensure new spending announced on road infrastructure does not come at the expense of nature.”
It wants the expected new Office for Environmental Protection that is being set up to have enough funding to properly hold the government to account.
In an attempt to shift the economy towards a closed loop, a new Plastic Packaging Tax will from April 2022 attempt to encourage packaging manufacturers to use 30 per cent more recycled plastic. This was roundly welcomed by the Environmental Services Association, but they added that it needed to be complemented by “other measures to stimulate local markets for recycled content and discourage manufacturers from using complex, wasteful, packaging that cannot be re-used or recycled”.
£5 billion (A$10 billion) is also promised to support the rollout of gigabit-capable broadband.
IEMA, a professional membership body for those working in environment and sustainability, lamented that “the absence of measures to tackle energy efficiency in the home are missed opportunities to accelerate the transition to net zero.”
Climate campaign group DeSmog UK summarised responses to the budget by saying “The consensus seemed to be that on plastic recycling, EVs, and diesel, Sunak did good things. But by promising to invest in more roads without outlining how these fit with a low carbon future… and deciding against unfreezing the fuel duty, he rather undid a lot of his good work – the fuel duty freeze has increased the UK’s emissions by as much as 5 per cent.
David Thorpe is author of the books Solar Technology and the new One Planet Cities. He also runs on line courses such as Post-Graduate Certificate in One Planet Governance. He is based in the UK.