Cabinet reshuffle: Is the promised ‘green budget’ in doubt?
Earlier this week Chancellor Sajid Javid was said to be reviewing a string of new subsidies to assist with the UK's net-zero transition. With Javid today (13 February) resigning from the position, doubts have been caused as to whether the UK Government can prioritise the green economy in the March Budget.
One of the key headlines of a chaotic cabinet reshuffle was that Sajid Javid has resigned as Chancellor. According to the Press Association, Javid had claimed that “no self-respecting minister would accept those terms”, which alludes to reports that Prime Minister Boris Johnson had demanded that Javid sack his understudies as part of a new joined-up advisory team between 10 and 11 Downing Street.
Welcome then Rishi Sunak, who steps-up from the role of Chief Secretary to the Treasury to take up the position as Chancellor. Sunak is a former Goldman Sachs investment analyst and also work for hedge fund management firm The Children’s Investment Fund Management.
It is hoped the Sunak can combine his finance expertise to drive investment in the green economy, of which he has some knowledge of. Between 2015 and 2017, Sunak was a member of the Environment, Food and Rural Affairs Select Committee.
Before the reshuffle, the Treasury was reviewing the total cost of meeting the UK’s 2050 net-zero target and exploring the ways in which costs should be paid. It was expected that the next Budget on March 11 – less than one month away – would prioritise green investment in order to kickstart the net-zero transition.
According to reports just this week in The Times, the Treasury is considering proposals that would see the subsidy and grant packages available for individuals looking to buy a new electric vehicle (EV) increased to £3,500 and extended beyond their planned closure this spring. Boris Johnson last week moved the UK’s ban on new petrol and diesel car sales forward from 2040 to 2035, as per CCC recommendations, and the new subsidy moves would support this transition.
New mandatory energy efficiency targets for social housing, schools and hospitals – bolstered by fresh Government funding for measures such as triple-glazing, roof insulation and LED lighting – were also mooted for inclusion in the Budget announcement. Cash incentives for housebuilders, landlords and homeowners looking to phase out gas boilers and fit rooftop solar arrays are also on the cards, Conservative Party sources told the paper.
Javid had gone as far as to promise to prioritise green spending in the next Budget – its first since the 2050 net-zero target was enshrined in law – alongside investment in public services.
Despite the speculation, specific details regarding where new funding will be invested are sparse at present, but emissions-related measures given significant weight in the Conservative Party’s manifesto include carbon capture and storage (CCS), hydrogen, nuclear power and energy efficiency measures for the built environment.
He was expected to announce the creation of a new task force in order to modernise and optimise the Government’s tax and spending, and to better even out the way funding is allocated between UK regions. Environmental research has repeatedly suggested that although the north of England is primed to lead the nation’s low-carbon transition, a lack of Government support for infrastructure and skills has hampered progress.
Johnson’s preference to fill the Treasury with his own advisors doesn’t necessarily hint to an overhaul in the promised green budget, but does suggest that he seeks more control over the spending decisions.
The approval of HS2, for example, has already raised fears that high-cost infrastructure projects may stifle funding for low-carbon initiatives, despite the Prime Minister pledging £5bn in funding to revamp bus and cycle links for every UK region. This includes at least 4,000 zero-emission buses and more than 250 miles of new cycle routes to promote cycling over car journeys in city centres.