‘Opportunity to reset’: How MPs are urging the Treasury to use tax policy to drive green recovery




'Opportunity to reset': How MPs are urging the Treasury to use tax policy to drive green recovery

Environmental Audit Committee Chair Philip Dunne talks to BusinessGreen about the need for ‘a tax system fit for net zero Britain’ and the right time to judge whether the government has delivered on its light-green retrieval predicts

MPs are urging the government to use the upcoming Budget to usher in a major alteration of the tax system to align the UK’s spending plans with its net zero and biological diversity commitments, alerting experience is running short to deliver on its promise of a dark-green economic recovery from the coronavirus crisis.

Parliament’s Environmental Audit Committee( EAC) today launched a wide-ranging report on the government’s lettuce recuperation agenda which says major reforms to UK taxation and the speedy release of long-awaited policy approaches will be central to laying the foundations of a greener, job-rich economy that protects nature.

Among a long list of proposed actions, it calls for cuts in VAT for light-green produces, the creation of a new National Nature Service to help protect wildlife, and scoping work to explore the potential for implementing an economy-wide carbon tax and carbon territory adjustments to drive investment in low-toned carbon infrastructure and action ‘carbon leakage’ from the UK economy.

Other recommendations include urgently delivering clear strategies to deliver new carbon capture and storage( CCS) and hydrogen projects, specifying clear and ambitious targets in the delayed Environment Bill, lay the foundations of domestic EV battery manufacturing at magnitude, and aligning the UK’s net zero and sort agendas.

It likewise calls on the government to “rigorously” assess its PS27bn road building programme against the UK’s air quality, atmosphere, and biodiversity objectives before individual programmes continue – a recommendation that follows disclosures arising from an on-going law challenge that Transport Secretary Grant Shapps overrode official advice that the controversial program should be reviewed on environmental grounds.

Philip Dunne MP, chair of the EAC, said the Covid-1 9 pandemic was a symptom of the wider environmental crisis the world currently faces, and should be treated as a “wake-up call” for Ministers to set the UK on a far more ambitious pathway to a net zero release, biodiverse future.

“The economic recovery will mold our national economy for decades to come, and it necessary that tackling climate change and rebuilding nature is at its core, ” said the Conservative MP for Ludlow. “There will be no inoculation against runaway climate change, and it is our responsibility now, abusing the opportunity of the economic recovery, to set the UK on track for net zero.”

The Chancellor is set to deliver the Budget on 3 March, and the EAC implored Rishi Sunak to grasp the opportunity to bring forward a raft of proposals to encourage green behaviour change and drive investment in low carbon engineerings and nature-recovery efforts.

One of the main recommendations in the report centres on slashing VAT on green concoctions for house energy efficiency upgrades and low-spirited carbon construction measures, as well as for repair services and products containing reused or recycled fabrics to boost uptake and investment in circular economy endeavors – a suggestion that was propagandized up the agenda earlier this month with the launch of a brand-new safarus by the Daily Express similarly calling for VAT to be axed on dark-green products.

The EAC also repetition calls for an overhaul and increase for the troubled Green Homes Grant programme, following weeks of negative headlines arising from administrative problems with the arrangement and approval from the government last week that it is withdrawing over PS1bn from the initial budget of the stimulus package.

Further tax motivations is appropriate to be given to ultra-low emission vehicles to boost uptake, while other current environmental taxes – such as Air Passenger Duty – should be reformed in order to better reward and drive efforts to develop greener aircraft technology, the EAC argued.

And, the Committee urged the government to begin scoping work on an economy-wide carbon tax – which it said would be “one of the most economically efficient ways to incentivise low-toned carbon choices” – in addition to looking at the potential merits of carbon territory adjustments.

“A tax system fit for net zero Britain is key, ” said Dunne. “It will encourage innovation, give confidence to the sector and patronage a corporation to fix the low-carbon transition. There are endless initiatives that can lead to a greener future and the Chancellor should use his upcoming Budget statement to start this process.”

Whether or not the Chancellor will take up the recommendations remains an open question. The report follows criticism from the government’s spending watchdog, the National Audit Office( NAO ), last week which accused the Treasury and HRMC of having exclusively a “limited understanding” of how the UK’s tax regime patronizes atmosphere and environmental objectives. Meanwhile, political opponents have thrown the authorities concerned for failing to deliver a multi-billion pound lettuce stimulus program similar to those adopted by Germany and France.

As such, calls are growing for the government to deliver on its promised ‘build back better’ agenda on variou figureheads. The EAC’s calls for VAT reform resemble those which have frequently come from a range of business and environmental groups over the past year, such as Green Alliance, the REA, and even the Sustainable Restaurant Association( SRA ), while proposals for an overhaul of carbon pricing program and the urgent verification of a raft of decarbonisation policies have widespread backing from business leaders.

Dunne told BusinessGreen he was looking to the upcoming Budget for the government to set a more ambitious course for a light-green retrieval, as he said there was a need for a “wider debate” about how taxation could be used to support the UK’s net zero transition.

“What it is essential to do as we pate towards net zero Britain is to open up a debate across the country about how should tax policy and concedes – incentives as well as retributions – be directed to help people change behaviour, ” he said.

Green asset

The report also takes aim at the Bank of England’s money programmes, following criticism from green campaigners that in the wake of the first Covid-1 9 lockdown last year the central bank did not place enough ‘green strings’ to the financial and lend supporter it offered to struggling high carbon companionships, such as airlines.

Going forward, the Bank should therefore ensure it includes climate and nature objectives in future pandemic-support programmes, such as requiring that recipients publicly disclose the climate threats facing their business in line with the Taskforce on Climate-related Financial Disclosure specifications, according to the report. It should also be given a specific mandate to help drive the net zero transition, and reduce the carbon intensity of its corporate ligament portfolio, the report added.

Meanwhile, the report says the government should ensure its proposed National Infrastructure Bank( NIB) escapes a same fate to its effective predecessor – the Green Investment Bank – which was sold off to the private sector in 2017. It calls for an “unequivocal guarantee”, potentially in law, that the NIB will remain a populace academy for the long term, adding that it should be given a mandate to promote projects focused on nature recovery, in addition to its proposed net zero mandate.

‘Opportunity to reset’

The government has repeatedly sought to position its pandemic recovery plans as an opportunity to build a greener economy, particularly given the UK is set to co-host the critical COP2 6 UN climate change summit in Glasgow later this year. Last-place time, the Prime Minister Boris Johnson promised to “build back better” from the crisis, before unveiling his 10 Point Plan for a Green Industrial Revolution in the autumn.

But amid several adjournments to crucial cyberspace zero programs – such as the Transport Decarbonisation Plan – as well as the contentious withdrawal of funding from the government’s flagship Green Homes Grant scheme last week, environmental groups have questioned the Treasury’s commitment to delivering a genuinely dark-green recovery.

“What such reports to consider ways to point towards is that some things[ the authorities concerned] have doing well, and some things they may have been disconcerted and haven’t gone to plan, ” reasoned Dunne. “So there’s an opportunity to reset and get back on board.”

Caterina Brandmayr, head of climate policy at Green Alliance, said the EAC’s report “rightly articulates the spotlight on what the government still needs to do to deliver a light-green recovery”.

Harnessing the Budget and forthcoming net zero strategies to deliver an environmentally responsible stimulus would “benefit businesses and communities across the country, and ensure the UK is seen as an environmental world leader as it prepares to host firstly the G7 and then COP26”, she said.

Responding to today’s EAC report, nonetheless, the authorities concerned vowed it was committed to a light-green retrieval, and foreground its plans to launch the UK’s firstly sovereign light-green attachment this year and acquaint mandatory climate danger revealings across the economy by 2025.

“We’re committed to building back better and greener from the pandemic, which is why the Prime Minister’s Ten Point Plan will employ the UK at the forefront of the world-wide lettuce industrial coup and make hundreds of thousands of green occupations, while the Treasury’s Net Zero Review is examining how the transition to net zero should be funded, ” the government said in a statement.




Green homes award fiasco

But concerns and confusion continue to surround the government’s flagship programme that was meant to be at the heart of its much-trumpeted ‘green recovery’ agenda.

The PS1. 5bn Green Homes Grant scheme was launched last-place summertime in a bid to provide discount vouchers that would reduce the cost of energy efficiency modernizes on homes. However, the arrangement has suffered from a multitude of difficulties from the beginning, with entrants facing administrative hurdles in accessing the programme and procure accredited tradespeople to carried out under the residence refurbishes, while there have been reports of installers themselves losing money, faculty, and business due to late pays through the scheme.

And in a surprise move last week the government sanctioned plans to remove potentially over PS1bn from the scheme’s budget that remains unspent by the end of March. The authority blamed householders’ reluctance to have tradespeople enter their homes as the primary motive of the Green Home Grant Scheme’s travails, but this explanation was roundly disagreed by business groups and political opponents.

The EAC has kept a close gaze on the scheme, earlier this month revealing simply over 21,000 vouchers towards the cost of home improves have been issued to date, a fraction of the government’s ambition to hand out 600,000 lettuce improvement vouchers.

Dunne too told BusinessGreen that in the evidence he had seen from applicants to the scheme nobody had cited Covid-1 9 frights related to installers participating their residences as a core problem. “The fact that merely a third of those applying for vouchers have had them approved tells a slightly different story, ” he said.

For its part, the government said it would “continue to bring forward bold measures to cut emissions, with plans to invest PS9bn in improving the energy efficiency of buildings forming part of our wider commitment to end our contribution to climate change by 2050 “.

However, while BusinessGreen has repeatedly sought to confirm whether or not the government’s goal of improving 600,000 residences through the Green Homes Grant scheme remains in place given its drastically reduced budget, BEIS has yet to provide clarification.

The EAC today therefore reiterated its demand for the authorities concerned renovation the anxious arrangement, and give it beyond its current March 2022 cut-off date in order to provide businesses and householders the long-term certainty they need to hire and train additional installers and submit applications for vouchers.

Fund evaluation

Whether the UK government can deliver a truly light-green convalescence from the current economic crisis remains to be seen, but with its leadership on climate change under the spotlight in the run up to COP2 6, it will be under significant influence to back up its encouraging ‘build back better’ rhetoric with discernible activity. The latest controversy over the Green Homes Grant, recent failures scrutinizing this reputational impairment incurred by allowing the progress brand-new coal mines, and the huge pipeline of long-awaited light-green policy decisions, have all served to undermine confidence that Minister have the key priorities straight-out, with the Treasury widely considered to be one of the key barriers to the development of a believable light-green recovery strategy.

For Dunne, however, the window for action is still open, and the coming weeks and months now offer a critical opportunity to set the government’s recovery efforts on an daring lettuce track. The upcoming Budget and following few months therefore look set to provide the clearest exam hitherto of whether the government’s light-green recovery predicts will be met.

“That will be the time to assess how effective[ the government’s endeavours] ought to have, ” said Dunne.

Read more: businessgreen.com









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