March 6th 2024
No growth on a dead planet: Budget 2024 is another climate blow
With national spending plans unveiled, experts are asking one glaring question: why is nobody talking about net zero and green industries?
Less than one fiscal quarter since Jeremy Hunt delivered his Autumn Statement, today the Chancellor unveiled his Spring Budget, updating us on the country’s finances and economic outlook. And once again environmental groups and climate scientists have been left wondering if part of the speech was missing.
In November, critics pointed to a lack of big commitments on energy, and particularly renewables and the net zero transition. Now this time ecologically-minded observers are asking why any reference to the climate crisis seems to have been redacted from the script. That is, apart from a snide comment about Sir Keir Starmer’s Labour Party abandoning its pledge to invest £28billion per year into net zero and green industries.
‘Yet another Budget that largely ignores the dangers of climate breakdown, and yet another missed opportunity to properly invest in building a strong, clean and prosperous future,’ said Mike Childs Head of Policy at Friends of the Earth. ‘New research published only last week revealed that the UK’s net zero economy grew by 9% in 2023, while the rest of the economy continues to stagnate.’
We shouldn’t be too surprised at the omission, or, more likely, the lack of plan for stimulating more activity within the environmental sectors. So far, Downing Street has repeatedly ignored calls from industry to create policies rivaling the US and European Union, where schemes are proving successful in encouraging investment in green sectors. Meanwhile, the Conservatives’ net zero roadmap has been widely criticised for relying on ‘everything going right’, including by one of the party’s own peers, raising serious concerns about what the medium-term fallout could be from not developing internationally competitive regulations and initiatives.
Sadly, the response from Labour leader Starmer wasn’t much better than the Budget itself, stopping for a brief comment about the state of sewage-filled rivers and lack of stable industrial policy, but only really to emphasise a longer tirade about Britons ‘being asked to pay more for less’ by the Tories, inflation and wage stagnation. A sure fire sign the opposition still doesn’t really know what its own path to net zero will look like.
At Environment Journal we have frequently been told by people working on the frontline of climate action that one of the largest obstacles to progress is a lack of adequate powers at council level, with local authorities best positioned to drive the changes that can set a town, city, or region on the right emissions course.
Yet there was little in the Budget about system-wide local funding issues. This is particularly surprising, given recent headlines about the largest local authority in the country, Birmingham City Council, preparing for an asset fire sale and cultural cull to claw-back vital revenue after filing a section 114 notice, essentially declaring itself bankrupt.
‘Local government was not entirely absent from today’s Budget. Headline announcements included a trailblazer devolution deal for the North East, devolution deals for Buckinghamshire, Warwickshire and Surrey, new Investment Zones and a series of funding deals to support housing. These will no doubt be welcome in those areas that receive them, but the Chancellor did not address the systemic funding issues in local government,’ said Dr Jonathan Carr-West, Chief Executive of the Local Government Information Unit.
‘Our latest research found half of councils believe they could face bankruptcy within the next parliament. Council taxpayers are paying ever higher rates for fewer services, and leisure centres, SEND provision and adult social care funding are all facing deep cuts. Now is the time for productive debate on the possible solutions to the local government funding crisis. Instead, the spending reductions required by this budget will increase all these pressures,’ he continued. ‘We need a proper debate about how we fund local services and we need to reform council finances. This scattergun pattern of largesse granted or withheld will no longer suffice.’
UK100, the national network of local leaders committed to climate action also echoed these sentiments, noting that the speech itself lacked ambition, and failed to reconcile the idea of regional powers fuelling innovation and change with the need to loosen regulations stopping them from taking effective steps towards a cleaner, greener future. This needs to change.
‘The Budget barely mentions Net Zero. Despite all the evidence demonstrating the path to productivity and growth runs through local Net Zero, with the sector far outperforming the wider economy last year,’ said UK100 Chief Executive, Christopher Hammond. ‘Meanwhile, as the Chancellor rightly said, productivity-boosting dynamism doesn’t come from Ministers in Whitehall, it comes from our communities. But right now local councils and communities are hamstrung by an uneven approach to devolution and piecemeal funding schemes that are needlessly bureaucratic.
‘As we go into spring, we mustn’t forget the rising numbers of people in fuel poverty and the millions who were unable to keep warm over the winter. Despite the issue getting little attention in the Spring Budget, everyone deserves a warm, affordable to run home, but for far too many households the reality is anything but,’ he continued. ‘The Government spent £40 billion subsidising everyone’s energy bills, but under the current fiscal rules, it is unlikely to be able to afford so again. National politicians can’t kick fuel poverty into the long grass in favour of short-term electioneering without storing up long-term problems. Rather than waiting until we’re again in crisis, the Spring Budget should have been a chance to accelerate retrofit projects that local leaders can unlock.’
Will Walker, UK Policy Lead at the environmental charity Ashden, reiterated this point, and stated that Hunt had ‘failed to read the room’ in a country where people ‘by and large, care more about long-term investment in public services and getting to grips with their energy bills than short term tax cuts’. Citing a YouGov poll which found 61% of voters would choose support with utility bills as one of three priorities to ease the cost-of-living crisis, the highest of any option, he challenged the Government to be braver, and go further.
Walker also pointed to a recent report from Lord Stern, Chair of the Centre for Climate Change Economics and Policy at Leeds University and LSE, showing an increase in public investment in net zero worth 1% of GDP could catalyse a further 2% in private financing. According to the analysis, this would be enough to get ‘back on track’ with decarbonisation.
‘The country is crying out for bold government leadership and a credible plan to address the triple-whammy of energy security, fuel poverty and the climate crisis. This has to be done through sustainable clean growth. Any plan needs to be backed with the right powers, resources and incentives to empower communities, leverage investment, upskill and expand the workforce, and revive the economy,’ said Walker. ‘Apart from some welcome extensions to existing government schemes, such as a relatively small funding boost to the Green Industries Growth Accelerator, this was another barren budget for net zero.’
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Image: Javier Miranda (top) / Casey Horner (middle)