Brown’s pre-budget gets thumbs down from environmentalists

The Chancellor of the Exchequer’s pre-budget, made public on 8 November, has won little praise from British environmental groups, but Gordon Brown insisted that the fuel measures he has proposed are right for the country and had not been designed to appease protesters. Among the proposals of concern to environmentalists are:

• a freeze in fuel duty (costing more than £500 million) for at least one year;
• cuts in fuel duty on low sulphur petrol, by 2p a litre by Budget 2001, with Brown predicting that low-sulphur fuel, at present a rarity, would be supplied at all petrol stations by Budget time in March 2001;
• cuts in fuel duty on low sulphur diesel, by 3p a litre by Budget 2001;
• a £100 million fund to subsidise replacement of older lorries;
• a “vignette” system to tax foreign lorries;
• changes to the vehicle excise system for lorries (worth £715 for each lorry), cars with medium-sized engines (saving £55)and tractors.

The Chancellor also pledged that employers will be able to reclaim 20p per mile cycled, instead of the current 12p, with VAT abolished on cycle helmets; a reduction of the size of company buses qualifying for tax exemptions, from 12 to 9 seats; and 2p per mile for drivers giving lifts to colleagues.

Commenting on his £4.8 billion give-away, which predominantly consisted of increased pensions, Brown insisted changes to fuel duty and vehicle licences would bring environmental benefits, rejecting accusations that cutting the price of ultra-low sulphur fuels would actually accelerate global warming by increasing car use. “The experts who had made the charge are wrong about this”, he said, insisting that green principles lay behind the announcements, and declaring that he would not “give in to fuel protesters”.

Treasury Minister Stephen Timms said that low sulphur diesel was responsible for “cutting emissions of the most damaging local air pollutants and enabling the introduction of new, pollution-reducing technology.”

However, ministers’ comments have done little to reassure Britain’s main environmental groups; “Low sulphur fuels are not green fuels”, said Greenpeace UK’s Policy Director, Stephen Tindale. “They are still oil and do nothing to combat climate change. Gordon Brown dressed this up as an environmental measure but he said himself that 100% of the diesel sold in the UK is already low sulphur. So this is a straightforward tax cut. ”

“The Chancellor should set up a green fuel fund to promote and develop the use of gas, bio-diesel, electricity and hydrogen, as called for by Greenpeace and the RAC Foundation”, Tindale added.

Friends of the Earth (FOE) said that Brown’s measures were announced “to help hauliers, and buy off fuel protests”. Money from fuel taxes should be spent on alternatives to the car, better and cheaper trains and buses, particularly in rural areas, and safer streets for cyclists and pedestrians, the group said. “We regret his decision to freeze fuel duty – we hope that car use will not rise as a result”, said FOE Executive Director Charles Secrett. “We have to learn that the age of cheap fossil fuels is over for ever. The job of Government is to help manage the transition to a sustainable economy,” he said, adding that the group welcomed cuts in low sulphur petrol duty to improve air quality. “But Mr Brown has missed the chance to take further action to fight climate change, by penalising heavy fossil fuel users and by imposing a windfall tax on oil company profits.”

The measures were also insufficient to appease fuel protesters who insisted that a planned mass rally of parliament on 14 November would go ahead. David Handley, chairman of the People’s Fuel Lobby, said: “Since the [pre-Budget report] announcement we have been inundated by phone calls from around the country saying it’s not enough.”