Budget 2015: Key points & green business reaction
"We back oil and gas," proclaimed George Osborne in his 2015 Budget announcement earlier today (18 March), but the Chancellor did announce some positive news for the sharing economy, low emission vehicles and renewable energy.
In what he called “a Budget that takes Britain one more big step on the road from austerity to prosperity,” Osborne said that a strong oil and gas industry was absolutely vital.
Before Osborne’s Budget announcement – his last of the current Parliament – edie heard from an array of sustainability professionals and green groups on their hopes and expectations from the 2015 Budget.
But it appears those hopes and expectations were, once again, not met. What Osborne actually delivered was deemed underwhelming by the majority of industry commentators as he brushed past green issues and thew his weight behind shale gas and other fossil fuels.
Here’s what you need to know…
Budget 2015: Key points
– Opening of negotiations on finance for the Swansea Bay tidal lagoon project.
– Osborne confirmed £60m for a new ‘energy centre’ in Birmingham, £100m for driverless cars and slower raises in car tax for ultra low emission vehicles
– £1.3bn support for North Sea oil industry. Petroleum revenue tax will be cut from 50 to 35%, while the supplementary charge for oil and gas was cut from 30% to 20%.
Osborne said: “The fall in oil price poses a pressing danger to the future of our North Sea industry unless we take bold action. And I take that action today.” The boost is expected increase North Sea oil production by 15%, while it could also increase investment by £5bn.
– Confirmation in the budget that Landfill Tax will increase in line with RPI, rounded to the nearest 5 pence, from April 2016. Suggests it will rise from £80 at present to £82.50 in 15/16 to £85 in 16/17.
-Osborne declared that the UK must support “the latest insurgent economies” as well as the traditional powerhouses. He said: “We need to take steps to put Britain at the forefront of the online sharing economy as our creative industries are already a huge contributor to the British economy.”
To encourage a sharing economy, the Government will make it easier to sub-let a room and encourage Local Authorities to use their business rates discretionary relief powers to support the sharing economy
– The government is bringing forward more than £16 million of the six-year flood defence programme announced in December to better protect more than 2,700 homes from flooding sooner than planned in the North West.
– The government is investing £140 million in world class research on the infrastructure and cities of the future, and £40 million in research into what is known as the Internet of Things.
– The Chancellor allocated £4.2m to tackle ‘waste-related crime’.
– The full Budget document is available here.
Budget 2015: Industry reaction
Dee Nunn, Wave and Tidal Development Manager, RenewableUK
“This is a significant step forward towards building the first tidal lagoon of its kind in the world. This pioneering project would ensure that Wales and the UK stay at the forefront of marine energy, providing clean electricity for 120 years and creating 2,000 jobs in the construction phase alone.
“By enabling this project to go ahead, the Government will also unlock the potential for other, larger tidal lagoons to be developed. Swansea Bay will generate the confidence needed to attract investors into those future schemes in the UK. So a negotiated strike price is needed for this first project as it’s the trailblazer which will generate momentum to kick-start the full commercialisation of this part of the marine energy sector.
“As the funding will come from the Levy Control Framework, which is a finite pot, the Government should ensure that other renewable technologies such as wind, wave and tidal stream are also allocated sufficient financial support, through an application process appropriate to their stage of development, to continue to develop to their full potential.”
Centre for Alternative Technology
“The north sea fossil fuels reserves have peaked and are now in decline and will only get more expensive. Rather than subsidise these jobs with public funds, the threatened jobs should be transferred to a massive expansion of the UK’s renewable energy sources – not just one but many barrages!”
“The Government needs to fund a research programme into the employment and economic benefits of actually rising to the challenges defined by the overwhelming consensus in climate science.”
David Powell, senior economics campaigner, Friends of the Earth
“With growing calls to divest from fossil fuels, massive tax breaks aimed at squeezing more gas and oil out of the ground show how dangerously out of touch the Chancellor is on climate change.”
“The Chancellor should heed the Bank of England’s warning about the threat climate change poses to our financial well-being by ditching support for gas and oil extraction – instead of propping it up.”
“Clean power and ending our fossil fuel addiction must be at the heart of energy and economic policy, not just a half-hearted sideshow.”
Patrick Harvie, Green MSP for Glasgow
“This is not a plan to make the UK a fairer or more sustainable society. Instead of an eye-watering £1.3 billion subsidy for fossil fuels, the Chancellor could have provided a gigantic boost to locally-owned clean energy or backed the return of our railways to public hands.”
“This Coalition has delivered five years of hacking away at the public good and at the foundations of our welfare state. It’s been a devastating and costly campaign by an elite in Westminster and the prospect of another round should terrify everyone who is fighting for social justice in this country.”
Alison Johnstone, Green MSP for Lothian
“The Westminster coalition try to paint a rosy picture but what they describe will seem to many like a fantasy economy, far removed from the reality of rising rents, insecure low paid work and the misery of welfare cuts.”
“The Greens want to see a £10 minimum wage and the small rises announced today are completely inadequate in a world of extreme high pay at the top.”
Nick Molho, executive director of the Aldersgate Group
“At a time where there is mounting evidence that ambitious policies to reduce carbon emissions, improve resource efficiency and protect our natural capital could deliver net economic gains to the UK and make our economy more robust to future resource shocks, it is in our national interest to put the environment at the heart of our country’s economic plan.”
“The upcoming election is a unique opportunity for all parties to integrate environmental policy as a key part of their economic proposals and show that they want the next Parliament to build an economy that will be competitive, secure and sustainable in the long-term.”
Gareth Stace, head of climate & environment policy, EEF
“While today’s announcement on the early introduction of some compensation from energy costs for sectors like steel is a welcome statement of intent, we are disappointed the Chancellor did not go further.”
“This deal will still leave energy intensive industries paying 80% of the costs of the renewables support until April 2016.”
“While the Chancellor is right to have grasped the urgency of the competitive pressures UK steel companies are facing, he will need to go further to fully compensate companies for the disadvantages they face. A healthy domestic steel sector is vital to a strong and stable economy and it must be able to compete fairly in a global market.
“Until the whole compensation package is in place, we are competing with one hand tied behind our backs.”
John Cridland, director-general, CBI
“With business investment a crucial driver of growth, the Chancellor has signalled his intention to continue the Annual Investment Allowance. We want it to be made permanent in the Autumn Statement at £250,000 – this will fire the UK’s economic kiln by spurring smaller firms to invest in plant and machinery.”
“The reduction of the headline rate of Corporation Tax to 20% next month, is a meaningful step in making the UK the most competitive tax regime in the G20 and will help to attract investment.”
“The oil and gas industry, which supports 450,000 UK jobs and is a major contributor to GDP, has been given a much-needed boost with the reduction to the supplementary charge and other incentives. This will help address concerns over job losses and investment freezes, but pressures remain due to low oil prices.”
David Nussbaum chief executive WWF-UK
“Opportunity knocked but the Chancellor only partially opened the door to greener, smarter growth.
“Backing for Swansea’s new tidal lagoon recognises that clean energy is an essential part of our future. But a greener budget would have sent a much clearer message that dirty fuels need to be phased out, rather than offering them tax breaks.
“The Chancellor could have created jobs and boosted growth through long-term incentives for clean technologies. Giving the Green Investment Bank access to private capital would help more enterprises prosper. And reasserting the role of the Natural Capital Committee would ensure more prudent management of the natural resources on which our economy depends.”
Ben Warren, environmental finance partner, EY
“At a time when other forms of renewable energy, such as solar, have become affordable and quick to deploy, it is interesting to see the Chancellor focusing on an ambitious, but costly new project.”
“What we have seen in the market is that the very slow passage of market reform and the late introduction of the CfD (Contract for Difference) regime has made it very difficult for developers to sanction investment in new projects. It would be hugely beneficial for the UK renewables sector to see the same level of support for already proven and cost effective renewables.”
Sam Corp, head of regulation, Environmental Services Association
“ESA and its members have been working closely with HMRC and Treasury officials over the last two years to develop the testing regime.”
“An objective LOI test will go a long way to prevent the misclassification of waste which has been so costly to responsible operators and to the UK’s economy.”
We hope that the Chancellor’s announcement will give operators the assurance they need to put in place the necessary measures to implement the regime from 01 April.”
Dr Nina Skorupska, chief executive, Renewable Energy Association
“We welcome the Government’s ambition and willingness to invest in renewable energy infrastructure confirmed in today’s Budget. The procurement of renewable energy is crucial to meet the UK’s legally binding energy targets in a cost-effective manner, improving energy security and delivering skilled jobs and inward investment.”
“However, our members will feel strongly that there was a missed opportunity to spread this commitment more widely to renewable power generation and renewable heat – both of which would thrive under a more stable regulatory framework which is fairer to smaller suppliers.”
“We challenge the next government to level the playing field for emerging technologies and create a policy framework which provides long-term certainty for investors.”
Dan Cooke, director of external affairs, Viridor
“Today’s budget offers only limited recognition of the opportunities a modern resource sector can bring. Britain urgently needs to resource the fight against rising waste crime which threatens the sector’s development and our economic and environmental interests.”
“Today’s announcement of a one-off increase in Environment Agency funding to crack down on waste criminals is therefore welcome indeed. But waste crime isn’t a one-off quick win and needs sustained support and resourcing.”
“With the sector at a point of inflexion, the budget was a missed opportunity to support the next wave of infrastructure investment needed to create 50,000 new jobs, deliver resources for UK manufacturing, enhance UK resource and energy security and skill a new generation of engineers and scientists.”
Brad Allen & Lucinda Dann
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