MPs urge Government to go green to beat the recession
Mar 18 2009 by Anna Blackaby, Birmingham Post
Government economic plans to pull the UK out of recession need to be much more “green”, MPs have urged.
A report from the Environmental Audit Committee said far greater investment was needed in measures such as improving the energy efficiency of housing in order to move the UK into a low-carbon economy and meet climate change targets.
Such measures could also provide jobs and improve energy security, the select committee said.
The MPs also called for increased taxes on domestic flights to encourage more people to travel by train.
And they raised concerns about the negative environmental consequences of the wider £3 billion financial stimulus measures which include plans for road building.
A report by the committee criticised the scale of the Government’s £535 million green stimulus package unveiled in the pre-Budget report as too small - especially as much of the money was not new.
It has been brought forward from 2010-2011 budget allocations and will be offset by spending cuts in future years, they said.
Instead, the MPs said the Treasury should be starting from the recent suggestion by Lord Stern that 0.8 per cent of GDP - or £11 billion in the next year - should be spent on green stimulus measures.
The committee’s chairman, Tim Yeo, said efforts to bring the UK out of recession provided an invaluable opportunity to build a sustainable economy, and there should be a “much bigger and more coherent” package of green measures in the Budget.
But he said the pre-Budget report showed the Treasury lacked the “consistency and boldness of purpose” required to drive change and tackle climate change.
He said: “The Treasury has announced very little new money for green investments.
“Yet meeting our climate change targets will require a step-change in funding for the low carbon energy sector, especially when the financial crisis has led to a shortage of capital.”
He went on: “There is clear evidence that investment in low carbon industries will lead to net job creation.
“The Budget should contain a much bigger and more coherent package of green fiscal stimulus.”
The committee looked at “green” announcements in the pre-Budget report, such as the new money for the Warm Front scheme to provide free central heating and energy efficiency measures. While they welcomed the extra £100 million for the programme, the MPs said the scale and speed of energy efficiency measures were “far too modest”.
Improving energy efficiency in housing needed to be accelerated and made the UK’s “number one priority for green stimulus” to improve energy security, boost jobs and cut emissions and fuel poverty, they said.
Spending on 200 new rail carriages, which also formed part of the green stimulus package, needs to shift people out of cars and planes, and the committee questioned how the Treasury would ensure that happened.
The report called for the Treasury to ensure low carbon energy projects got the finance they needed even when there was a shortage of capital. And it urged the Treasury to look at imposing some kind of environmental criteria on the investment strategies of the banks the Government has a controlling stake in.
The MPs also called on the Government to reinstate plans to replace Air Passenger Duty (APD) with a per-plane tax to make airlines fill flights more efficiently.
