Key announcements from Budget 2017

The chancellor has announced more support for electric and driverless vehicles as part of his 2017 Budget, and as widely predicted, announced he will consider a tax on single-use plastics.

Phillip Hammond announced a series of measures and policies, which he said would ‘seize opportunities’ for Britain.

Here is a round-up of the key points from Budget 2017:

Transport and pollution

In a rare moment of humour, the chancellor hailed the development of driverless cars, before adding ‘I know Jeremy Clarkson doesn’t like them’.

‘But there are many other good reasons to pursue this technology, added Mr Hammond. ‘So today we step up our support for it.’

The chancellor announced a new £400m charging infrastructure fund, an extra £100m in Plug-In-Car grants, and £40m for charging research and development.

‘And I can confirm today that we will clarify the law so that people who charge their electric vehicles at work will not face a benefit-in-kind charge from next year,’ he told MPs.

‘The tax system can play an important role in protecting our environment,’ he added. ‘We owe it to our children that the air they breathe is clean.’

The chancellor also announced that vehicle excise duty for diesel cars that do not meet latest standards to rise by one band in April 2018 and the existing diesel supplement in company car tax will increase by 1%.

Money raised from this will help fund a new £220m Clean Air Fund to provide support the implementation of local air quality plans.

Chair of the parliamentary environment, food and rural affairs committee, Neil Parish, said the new measures against diesel cars must be matched by a ‘legislative drive to encourage greener transportation’, including support for low-emission vehicles.

‘It should also, where possible, not disadvantage those currently using diesels who are not in the position to change their vehicle in the short term,’ added Mr Parish.

And the author of Centre for London’s recent Streets Smarts report said, Tom Colthorpe, warned electric vehicles are ‘no panacea’ when it comes to tackling air pollution.

‘Electric cars produce particulates from their tyres and brakes which are linked to serious health problems.If the government is serious about air quality, they must not overlook these risks,’ said Mr Colthorpe.

‘London should lead the way in promoting non-polluting transport policies – as the mayor has set out in his draft transport strategy.’

Bram Miller, a technical director at environmental and engineering consultancy Ramboll Environ said electric vehicles will bring significant new demand for electricity.

‘So the plan to proliferate charging points around the country must be carefully considered to make sure that these points are properly distributed,’ added Mr Miller.

‘Additionally, this is an opportunity to restrict the use of highly polluting vehicles in areas of poor air quality, going beyond congestion charges to really protect the air of our city centres in particular. This must be an eventual goal for the government if they are to embrace electric vehicles.’

Waste and recycling

As widely reported in the run-up to the Budget, the chancellor confirmed he and the environment secretary, Michael Gove, will look into the idea of taxing or levying a charge on single-use plastic items in a bid to reduce waste.

‘I want us to become a world leader in tackling the scourge of plastic, littering our planet and our oceans,’ the chancellor told MPs.

‘Because we can’t keep our promise to the next generation to build an economy fit for the future. Unless we ensure our planet has a future.’

The executive director of the Environmental Services Association, Jacob Hayler, welcomed the news and said a tax or charge on single-use plastics would make producers more responsible for the ‘end of life of their plastic products’ and relieve the pressure on local authority budgets.

And the UK chief executive of recycling and recovery experts Suez, David Palmer-Jones said a review of single-use plastics was a ‘vital step towards’ achieving a ‘more resource-efficient society and encouraging producers to take more responsibility’.

‘Policy and taxation changes are welcome if they can help reduce the use of virgin materials in favour of more sustainable, recyclable products,’ said Mr Palmer-Jones.

‘An extended producer responsibility regime should address all forms of resource usage, materials and packaging production, and their collection, reuse and recycling across the supply chain.’

Energy

Although there was no mention of renewable energy in the chancellor’s speech to parliament, the main Budget document states the government will ‘continue to support low carbon electricity as it becomes more cost-competitive’, including through up to £557m for future Contracts for Difference auction rounds.

But the report also states ‘in order to protect consumers’, the government will not introduce new low-carbon electricity levies until the burden of such costs are falling.

‘On the basis of the current forecast, this means there will be no new low-carbon electricity levies until 2025,’ the report states.

The document also states the UK’s carbon price is currently set ‘at the right level’, and the government will continue to target a ‘similar total carbon price until unabated coal is no longer used’.

The executive director of the Aldersgate Group, which campaigns for a sustainable economy, Nick Molho said the ‘lack of clarity and progress on the future of low carbon power investments’ and energy efficiency standards in new buildings was disappointing.

‘To reduce power sector emissions cost-effectively and continue to grow renewable energy supply chains, the UK needs a policy environment that allows it to deploy mature low carbon technologies such as onshore wind without subsidy, increase its ambition on offshore wind in the 2020s and keep the door open to improvements in new technologies,’ added Mr Molho.

‘The announcement that there will be no new low carbon electricity levies until 2025 mustn’t get in the way of that.’

While Jonathan Marshall, energy analyst from the Energy and Climate Intelligence Unit (ECIU), said: ‘Keeping the carbon price floor unchanged was the bare minimum expected before the Budget, and does not make up for the hat-trick of freezing new low-carbon support, throwing North Sea oil and gas another lifeline, and shying away from fuel duty changes that would both encourage lower-carbon transport and tackle the air pollution crisis.

‘Failing to consider measures to cut energy waste in new houses could also be costly, adding hundreds of pounds to energy bills of those affected and making it more difficult to reduce our dependency on fossil fuels for heating and powering our homes,’ added Dr Marshall.

‘All in all, it suggests that the recognition that green growth is good for UK Plc, clearly on display with the launch of the Clean Growth Strategy, has failed to permeate through to the Treasury – surely a missed opportunity as the government looks to make the country fit for the future post-Brexit.’

Photo by Petra Sejba