Mar 22 2012
Budget 2012: Death of the greenest government ever
By Tom Burke
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What Cameron put together Osborne is now taking apart. Detoxifying the Conservative Party while in Opposition has been the Prime Minister’s greatest political success. It got him his current job. It also got the Chancellor the opportunity to present budgets.
Hugging huskies was a central plank in this Hilton inspired strategy. As was Cameron’s now notorious first day walk across Whitehall to cement his Coalition in place by announcing that his would be the ‘greenest government ever’.
He may have meant it at the time. He may even mean it still. But he is doing nothing to prevent his Chancellor from re-inventing the Nasty Party with his sustained assault on the environment.
This continued today. The planning system is to be trashed on the altar of growth. Except that the evidence is overwhelming that the planning system creates no obstacles to growth except in the mind of cowboy developers. 90% of planning applications are approved. Most within a year.
The Carbon Reduction Commitment imposes unnecessary costs on business. This is really rich. The Chancellor is right about it being a bit cumbersome. That is because it was designed to recycle money from companies that did poorly at reducing their emissions to those who did better, thus providing an incentive for the poor performers to improve.
But then the Chancellor stole the proceeds of the billion pound levy that was to be used to finance the scheme. So, he is also right to call it an unnecessary cost on business. That is because he made it so. By taking away the levy he removed the incentives that made the CRC worthwhile and turned it into another stealth tax.
Oil and gas company profits are the biggest ever so how can further subsidies to them possibly be justified.
It would not matter if he abolished it completely because it is doing nothing useful for the environment. Ah, but that would remove the useful tax revenues. Instead, we are promised ‘an alternative environmental tax’ which we can confidently expect to do nothing for the environment either but it will make a helpful contribution to the public finances.
The Chancellor is right to be concerned about the burden on British householders and business of rising fuel prices. That is why the Government has supported the G20 drive to persuade developing country governments to reduce the huge consumption subsidies that stimulate demand and thus drive up global fuel prices.
But he cannot expect anything other than a loud raspberry from those governments when they hear that he is to give our oil and gas industry a £3 billion pound production subsidy. Oil and gas company profits are the biggest ever so how can further subsidies to them possibly be justified. Furthermore, the Chancellor claims elsewhere in his speech that gas is cheap. Well if gas is cheap, why do we need to subsidise its production?
I could go on, but the message is already clear. If the Prime Minster wants to keep his greenest government ever pledge he is going to have to talk seriously to his Chancellor.