Green jam tomorrow, as budget looks for better measures of progress

The coalition’s first budget headlines are all about tax rises and benefit cuts, but beneath the surface there are some interesting hints of deeper change towards a green economy.

The environment certainly didn’t make the headlines, and was hardly mentioned in George Osborne’s speech, but in the full text of the budget, the Treasury has done the unthinkable, and hinted it might dismantle its own obsession with GDP growth. David Cameron’s flirtation with the idea of ‘general wellbeing’ and better metrics for progress seemed to disappear from the rhetoric in the run-up to the election, but on page 10 of the budget they resurface in a box about economic performance: “The Government is committed to developing broader indicators of wellbeing and sustainability, with work currently underway to review how the Stiglitz, Sen and Fitoussi report [on measurement of wellbeing and sustainability] should affect the ... indicators collected by Defra, and with the ONS and the Cabinet Office leading work on taking forward the report’s agenda across the UK.” Sounds great, but for now it’s all rather exploratory, and this box is the only place where sustainability is used in connection with the environment – the other eight mentions are all in the more limited economic sense.

The nearest we come to concrete green measures is a short section of the budget’s 121 pages devoted to the low-carbon economy. Here the government acknowledges once again that climate change is one of the most serious threats that the world faces, and suggests that the UK needs £200 billion of investment in low-carbon energy over the next decade. To do this, reform of the energy market is in the pipeline, with proposals to be published ‘in the autumn’ for reform of the climate change levy (to better support the carbon price), to be brought into law via the 2011 Finance Bill. There are also firmer plans for the creation of a green investment bank (but not ‘til after the spending review) and promises of a green deal for households, including pay-as-you-save schemes, to hasten the uptake of home energy efficiency measures.

The government will also "explore changes to the aviation tax system" such as switching from a per-passenger to a per-plane levy, and will consult on major changes, but for now there is to be no increase in fuel duty for drivers. And there are a couple of tweaks to the structure of company car taxation to favour lower-emitting vehicles, and the promise of legislation in the autumn for enhanced capital allowance for zero carbon goods vehicles.

Does all this add up to a green revolution? And in the round, is this a progressive budget, as the Chancellor claimed? Campaigners on social issues will see the loss of disability benefits (the Disability Living Allowance will be subject to ‘objective medical assessment’ – in time expected to save over £1billion), and the failure to increase duty on cigarettes and alcohol as a step back. For the poorest - pensioners and the unemployed - the VAT increase will hit hard. And much of the cutting is set for October, when another statement will flesh out how ‘unprotected’ government departments - which include environment and energy/climate change - are expected to cut 25% over the next four years. Tough times ahead.