Budget Spring 2020: What it means for future sustainability and for the West Midlands

New Chancellor of the Exchequer, Rishi Sunak, yesterday delivered his first Budget setting out the Government’s taxes and spending for the year ahead. As well as a £30bn package to help the economy respond to coronavirus, there were some positive commitments for sustainability and for areas of the West Midlands.

Sustainability and climate change commitments:

  • An additional £10m to support the design and delivery of net-zero policies and programmes and confirmation that a spending review will have climate change as one a key priority
  • Plastic packaging tax to come into force from April 2022
  • Manufacturers and importers whose products have less than 30% recyclable material will be changed £200 per tonne
  • Help for more energy intensive industries to transition to net zero by extending the climate change agreement scheme for another two years
  • A freeze on the Climate Change Levy on electricity and a rise on gas
  • Subsidies for fuel used by off-road vehicles – known as red diesel – will be scrapped for most sectors in two years’ time with the exclusion of agriculture and rail
  • Investment in the energy innovation programme will double to £1bn
  • As well as taxing pollution, the Government will invest and cut taxes on clean transport – making it cheaper to buy clean vehicles
  • Carbon capture and storage investments of £800m to create two or more carbon capture storage clusters by 2030 – creating up to 6,000 jobs
  • £640m “Nature for Climate” fund to protect natural habitats with planting over 30,000 hectares of woodland and peatlan restoration
  • Extra £900m for UK businesses to lead the way in high-potential technology and sectors, including electric vehicles

Commitments impacting the West Midlands:

  • Of the £27bn for road improvements, the West Midlands will receive a minimum of £500m for transport and roads
  • £20m committed to the Midlands Rail Hub and £160m for the Eastside Metro extension in Birmingham and phase one of the Sprint bus rapid transit network
  • £400m for new build homes on brownfield sites to protect green belts
  • For the 2022 Commonwealth Games, a £23m fund to boost businesses involved in trade and tourism for the event
  • As part of the £5.2bn investment on flood defences, £1m will be used for the Bridgnorth Flood Alleviation Scheme, and £23m for communities in the Severn Valley
  • Other commitments that will benefit the West Midlands is the expansion of the affordable homes programme and £5bn spending on gigabit broadband

West Midlands Mayor, Andy Street, has praised the Budget for supporting families, transport, housing and skills across the region.

However, many environmentalists have criticised the Budget for not going far enough to support the transition to a low carbon economy and emissions reductions required to meet net zero by 2050. Whilst the measures above are encouraging, the support for a huge programme of road building is a seen to contradict the net zero plan. This is compounded with the announcement of no change to taxation for the oil and gas industries, and continuation of the 10 years-long freeze on fuel duty.

The “Nature for Climate” fund is welcomed. However, the pledge to plant 30,000 hectares of woodland is well below the commitment in the Conservatives manifesto to triple tree planting rates to 30,000 hectares annually.

The chancellor was due to announce a new 30 year National Infrastructure Strategy (NIS) alongside the budget but earlier in March this was delayed until later in the spring, and by May. The delay was put down to a need to refocus the strategy in light of the challenge of achieving net zero over the 30 year period. It is hoped that the new strategy will an opportunity to define how the anticipated £100bn will be spent, and specific actions required to meet net zero.