Rishi Sunak urged to charge-up green investments in UK’s Covid recovery
From the net zero transition to air pollution and electric vehicles, Chancellor Rishi Sunak is being urged to ramp up green investment as part of the Covid recovery.
MPs on Parliament’s Environmental Audit Committee have set out guidelines for how Sunak can introduce more ambitious environmental measures.
In the report, Conservative and Labour MPs criticise the government’s “ten point” climate change plan as ‘not going far enough’.
They also call for the Chancellor to reduce tax rates on goods that include recycled items, as well as on environmentally friendly home upgrades.
The measure met with the approval of renewable energy supplier Bulb, whose chief executive Hayden Wood wrote to Sunak supporting a VAT reduction for such products.
“Making low carbon products and green technology cheaper will provide a welcome cash boost for hard-pressed families”, he wrote.
“For example, cutting VAT [to zero] would reduce the cost to consumers of a Honda E, a mass-market pure EV, by over £4,500, making it more affordable for drivers to switch away from petrol and diesel vehicles ahead of the 2030 ban that the government has announced.”
In addition, lawmakers recommended that Sunak begin work on the introduction of an economy-wide carbon tax.
Thus far, ministers have eschewed such a levy in favour of an emissions trading mechanism like that of the Eurozone.
Green hopes for March’s budget
Sunak will deliver the long anticipated budget on 3 March, with high hopes of a clear plan for economic recovery after Covid..
MPs want the government’s manifesto commitment from the 2019 election of ‘Build, Build, Build’, to be combined with a pledge to provide low carbon homes.
The committee’s report also pushed green jobs and decarbonising industries as key priorities to address.
Green jobs, they said, would come from green energy projects, planting trees and restoring wetlands.
Committee chair Philip Dunne said the Covid-19 crisis was “a wake-up call”.
“It is a symptom of a growing ecological emergency. The economic recovery will shape our national economy for decades to come, and it is crucial that tackling climate change and restoring nature is at its core.
“A tax system fit for net-zero Britain is key. It will encourage innovation, give confidence to the sector and support companies to make the low-carbon transition.
“There are endless initiatives that can lead to a greener future and the Chancellor should use his upcoming Budget statement to start this process. Boosting energy efficiency of homes by reducing VAT on retrofits can spur growth in low-carbon manufacturing.
“The funding allocated to the Green Homes Grant should be rolled over to meet the target to issue 600,000 vouchers. The electric vehicle transition must be accelerated with further tax incentives to encourage take up.”