Budget 2017: does it offer anything for the green economy?

With a nickname like ‘Spreadsheet Phil’, Hammond’s first spring budget as chancellor was never going to be an exciting affair. Aside from increases in National Insurance contributions from the self-employed and a few other teased tidbits, there was little to raise the eyebrows of voters or opposition parties.

However, what will have been picked up on across the green economy is that as usual, it was all but omitted from Hammond’s uneventful speech. Some were at least hoping from some acknowledgement of the growing pressure around the ‘solar tax hike’, brought about by changes to business rates applied to solar properties.

Unfortunately, the predecessor to the less than green-minded George Osborne showed he made for a good replacement with the words ‘solar’, ‘climate change’ and (almost) ‘energy’ absent from both Hammond’s speech and his Treasury documents. Unsurprisingly, this left many with that all but familiar feeling for green activists on budget day; dazed, confused and just a bit ticked off.

On the business rates issue, which to the industry’s credit has galvanised action across a huge spectrum of parties (arguably more than the most recent feed-in tariff cuts), this seemingly marks the end of another disappointing chapter in government renewable energy policy.

Sadly, this is even more galling on a day that Hammond plans for new tax incentives to make it easier for operators to sell oil and gas fields, helping to keep them productive for longer.

Paul Barwell, chief executive of the Solar Trade Association, said: “We are dismayed that responsible organisations that use their own rooftop solar are still facing an extreme business rate rise of up to 800% from April.

“Some fossil fuel technologies are already exempt from business rates, and today the chancellor again took special care of oil and gas. It is surprising that the Treasury’s tax policies tend to yesterday’s technologies while putting clean, modern solar at a competitive disadvantage. The chancellor says he wants the UK at the 'cutting edge of the global economy' - his tax policies for energy risk the opposite.”

It wasn’t a great day for the rest of the low carbon economy either, with no further updates on the future of low carbon generation or energy efficiency support for either businesses or domestic properties.

It even kicked any hope of a future for the UK’s carbon policy into the long grass, with a brief mention deep in the 68-page Treasury document that the UK would set its own carbon price and a specific tax rate after 2021/22. In its words, this would give businesses “greater clarity on the total price they will pay”, with further details on carbon prices for the 2020s to be set out at Autumn Budget 2017.

The same is true of the Levy Control Framework, which Hammond had been kind enough to share with us in the last autumn statement. Reiterating it today, the future of the LCF will be set out “later this year”, presumably meaning the new official Budget date in the autumn.

This is of course assuming that the government would not delay this further and build even greater levels of uncertainty around the future of the LCF, but after the last year of political upheaval there’s no guarantees, particularly with Brexit holding sway over almost every Whitehall department.

One spec of news related to the energy sector, in addition to those oil and gas tax treats, is that an Industrial Strategy Challenge Fund will be used to “kick-start the development of disruptive technologies”.

An initial investment of £270 million in 2017-18 will be used to help transform the UK economy, with the first wave of funded projects to include the development, design and manufacture of batteries that will power the next generation of electric vehicles.

BEIS secretary Greg Clark clearly wasn’t joking when he said EVs and battery storage would be “at the heart” of the UK’s industrial strategy and with the government doing its best to entice the biggest car and battery manufacturers in the world (including a certain giga-scale company in California) to either continue their work here or make the UK a home away from home, the Budget has at least shown that appears to remain a commitment.

However, that is in no way enough to warrant any approval of the government’s continued oblivious approach to the UK’s low carbon economy. So many reports have been published outlining the benefits this sector could have if nurtured properly (even some by government) that at this stage, either by ignorance or design, the government’s approach can only be deemed lacking.

Coming off a shaky PMQs before the Budget statement, embattled Labour leader Jeremy Corbyn redeemed himself in some measure with his response to Hammond, accusing the chancellor of “utter complacency”.

While he was taking aim at the more voter-friendly issue of the economy in general, complacency is the word that sums up Whitehall’s approach to the economic, social and environmental benefits of low carbon investment and transition – time will tell if it can show it is aware of this.