A reaction to the Budget

Those working in nature conservation are used to making a little go a long way and, despite the clear need for investment, we did not expect to be showered with funding in today’s budget.

We had wondered whether the Chancellor might adopt language from the Natural Capital Committee which argued that a healthy natural environment underpins our prosperity.  This would have provided the opportunity to reinforce commitments to restore the natural environment in a generation.

We had also hoped for some degree of policy stability and support. Yet, when the whole environmental sector is trying to do more with less and seek new private finance routes to address environmental challenges those efforts are made more difficult by today’s budget.  

Defra's budget remains a little precarious.  The Chancellor has said that departmental cuts will not be higher than in 2011/12 although Defra has already been asked to make £83 million in-year savings.  We are expecting more detail following the comprehensive spending review, results of which are likely to be announced in the autumn.  It, therefore, remains uncertain what the implications will be for the statutory agencies or Defra capacity.

Perhaps more worryingly, the Chancellor only mentioned the environment to reduce incentives to protect it and our economists have scanned the detail and have come up with a number of change which undermine ambitions for a green economy...

· policy to increase revenue from green taxes cut

· fuel duty still frozen

· climate change levy and carbon reduction commitment energy efficiency scheme to be reviewed

· eligibility for oil and gas tax breaks expanded on top of the £1.3 billion tax break the industry got in March

· vehicle tax incentives for low emission vehicles to be reviewed

· all vehicle tax revenue to be spent on roads (ignoring public transport)

· climate change levy renewables exemption removed

· aggregates levy exemptions reintroduced

· plans established to sell off the Green Investment Bank

The problem with all of this is that any business which had been looking at investing in green technology or environmental work will ask themselves how reliable the remaining incentives are. How can long term decisions be made when government makes it clear that short term politics might change incentives at any time?

The vehicle excise duty is a good example. The Chancellor tells us that he has to scrap reductions for low emissions vehicles because there will soon be so many of them that income from vehicle excise duty will disappear. Is that a failure to raise funds or a successful impact on technology change? The message sent is that the moment you reduce the cost of low environmental impact technology the government will seize back the difference rather than moving to tax another “bad”.

All of this means that existing public money - such as Countryside Stewardship - must be made to work as hard as possible for threatened species and habitats.   

Public money will be tight - we accept that.  But when we start looking for ways to incentivise business to help protect habitats without public money we find ourselves standing on quicksand. We have never been able to fully fund nature conservation ambitions (every costing exercise I've known has identified a shortfall of funds) and when welfare budgets are being cut we don’t expect largesse, but we could really do without the other doors being slammed into our faces too.

I understand that we can, perhaps in the autumn, expect a government response to the third Natural Committee Report.  I hope that this will be the moment that the Treasury comes out to bat for Defra and invests energy in exploring the NCC's big ideas for mobilising finance for nature.