Back in November, there were fears that the Spending Review would result in deep cuts to the Defra budget in a Spending Review. In the end, new economic forecasts came to the rescue and handed the Chancellor £26 billion he didn’t know he had. This led to something of a reprieve with Defra 'only' having to find 15% of savings (see here).
Once again, with the rumours of a further £4 billion in spending cuts, our economists waited in trepidation for news of how the environment would fare in today's Budget.
The expected £4 billion of cuts shrank to £3.5 billion but were not allocated – the Chancellor preferring to allocate them to a general aspiration for ‘efficiency savings’ for the moment.
So Defra's budget came out of today’s speech unscathed. Remember though that Defra has, since 2010, fared worse than most government departments and will have been cut by around 50% in real terms between 2010 by 2020 and (Decc by 37%). Defra will be receiving the fourth biggest cuts of any department and the £3.5 billion left to be assigned could swallow it a couple of times over.
Defra is currently working on its 25 year plan for nature without extra funding. Successive governments have failed to match resources to meet nature's needs and so it will be especially challenging and the Government will have to find innovative ways of bridging the funding gap.
There is some good news here because the most surprising and innovatory aspect of the Budget was the introduction of a sugar levy on sugary drinks. This measure, which had wide support from academics, public health experts and celebrities like Jamie Oliver, re-introduces two important principles for fiscal measures. Firstly, they can be used explicitly to effect behavioural change and secondly, that the proceeds can be earmarked for specific uses (sport activities in schools in the case of the sugar levy). The RSPB has explored the beneficial use of such taxes in issues from peat use in horticulture to pollution in water courses. They could have a major part to play in stemming environmentally damaging activities and, as the Landfill Tax demonstrates, they work really well.
The Landfill Tax was introduced by the last Conservative Government and was the first time anywhere in the world that the cost of a green tax was directly linked to the environmental damage caused. The tax increased the cost of throwing things away and increased the incentive on councils to improve facilities for recycling which in turn affected household behaviour. In terms of success, the household recycling rate was around 7% of total waste in 1996 , today it has reached 45% . That shift has a direct impact on land use as old quarries can be turned into wetlands and fewer landfill sites also reduces the polluting effects that can follow. Additionally, Landfill Operators can retain a small percentage of their total tax liability to invest in the Landfill Communities Fund (LCF). This fund is then invested directly in things for the communities around their landfill sites. Things like scout huts but also, very significantly in nature conservation. Defra estimates that about £13 million of funding for biodiversity comes from the LCF. That is about 3% of all the biodiversity funding in the UK.
Species like the tree pipit are flourishing at places like Broadwater Warren thanks to funding from the Landfill Community Fund (Credit: Graham Catley)
Ten times today, the Chancellor emphasised that this was a Budget that put future generations first. I hope the creative thinking shown on the sugar levy will open the door to explore further opportunities to use fiscal instruments to incentivise pro-environmental behaviour and help it meets it commitment to pass on the natural world in a better state to the next generation.
One final point of interest from today's Budget relates to the announcement on infrastructure spend. In addition to the need to accelerate spend on physical infrastructure, the Chancellor spoke of the need to support cultural infrastructure as well. If the Chancellor could just add environmental, or green, infrastructure to that list and consider some more places to implement behavioural taxes the 25 year plan to restore biodiversity in a generation might just get the financial support it needs.
If we can make that happen, perhaps in 2017 we will be in a position to applaud a green Budget.
Yes, it is a big 'if' but what Martin doesn't mention - and which in my view is a gamechanger the conservation sector ignores at its peril - is the re-constitution of the Natural Capital Committee. The NCC talks the Government's language on the economic benefits of the environment and, following their report last year, they could hardly have asked for anything more than this winter's floods to drive home the message that the environment is part of the economy. that is important, equally so is the case for conserving our peatlands as one of the most effective ways to capture carbon, but most important is their recommendation for 250,000 hectares of community forests (for which I read 'green space' - including a range of wildlife habitats) around our towns and cities. Wildlife doesn't have to be somewhere else and it is the opportunity to breathe new life into our sadly neglected green belts, as well as provide great environments around new housing - imagine, for example, if the houses were built next to Lodge Hill, not on it, what a marvellous place for both people and Nightingales it could be. And the NCC estimates an economic benefit of £500 million per annum !
I think that "if" in the last sentence Martin is quite a big if. Unfortunately the record of the Cameron /Osborne duo shows a poor commitment to and interest in the environment and nature conservation. I hope I am wrong on this but I don't think so. Deeds or lack of them speak much louder than words, especially as far as politicians are concerned.
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