Budget 2020 rightly focused on the global outbreak of Covid-19 and the need to shield people and businesses from the worst of the economic shock. The speed at which the virus is spreading, and the range of measures being taken to mitigate its effects, are a real test of community and business resilience in our interconnected world.
The chancellor also unveiled a series of initiatives and spending commitments aimed at boosting investment in natural capital and clean growth. It's a welcome sign that the government is starting to put sustainability at the heart of the economic model, although there's a long way to go. Five key commitments that caught my eye:
- Three new natural capital funds: a 'Nature for Climate Fund'; a 'Nature Recovery Network Fund'; and a 'Natural Environment Impact Fund'
- A doubling of flood defence spending to £5.4bn in the next six years – the right move, given UK climate projections are for warmer, wetter winters and more intense storms
- The plastic packaging tax set at a rate of £200/tonne to boost UK recycling processors
- The removal of the red diesel entitlement from April 2022 for construction plant – a significant incentive for the sector to innovate in the design and use of new clean technologies
- Rebalancing the Climate Change Levy to remove incentives to use gas, and the introduction of a Green Gas Levy to support the use of biomethane.
The chancellor unveiled a series of initiatives aimes at boosting investment in natural capital and clean growth
Other notable initiatives include a carbon capture and storage infrastructure fund, £500m extra for the fast-charging electric vehicle network, and an extra £304m to reduce NO2 emissions. Enthusiasm will be tempered by the freeze in fuel duty and the delay in tackling home energy efficiency, which do not reflect the urgency needed to tackle the climate and environmental emergency. Road spending would need to be viewed through the lens of electric vehicles if they are to make sense in a net-zero world – but overall, this is a positive start.
