On the eve of COP26, Rishi Sunak had a historic opportunity. World leaders would be paying particular attention to the pomp and ceremony surrounding this year’s Budget, with Britain playing host to the largest climate conference on the planet in only a matter of days. A chance, you would think, to flaunt the country’s green credentials.
Another Chancellor might have made a few announcements about green investment as a headline commitment to show that Britain means business. But not Rishi Sunak. Instead, despite characteristic fawning over the Chancellor from the press in the build-up (mercifully lacking in Superman regalia), this Budget announcement offered little new or serious investment in a just green transition. In its place, the public was gifted the oppressive optimism of a market-led strategy that decried ‘reckless unfunded pledges’.
On the day of the announcement, Boris Johnson called on world leaders to make ‘big commitments’ ahead of COP, including abandoning ‘fossil fuel, internal combustion machines’ and delivering ‘green funds’ of $100 billion per year to support decarbonisation overseas. Think tank IPPR called for £47 billion to take our economy to full employment, with £30 billion for green projects.
Yet just hours later, the Chancellor clearly hadn’t got the memo about a turn to ‘Green Keynesianism’. To the bewilderment and horror of many watching his announcement, Sunak pledged to cut air passenger duty rates by as much as 50% on some domestic routes. Under the auspices of ‘cutting the cost of living’, this policy encourages millions more people into patterns of transport that are on average six times more carbon intensive than a comparable journey by train.
At a time when we should be winding down domestic routes, this policy isn’t just ignorant, it’s outright dangerous. By conflating taxation of domestic air routes with cost of living, the government is normalising this mode of transport as an essential service at the worst possible moment.
Even established polluters like France have recently committed to ban short-haul domestic flights where train alternatives already exist. After the government bailed out aviation companies at the height of Covid last year to the tune of billions, a savvier climate operator would have taken them into public ownership to enable a just transition for workers. Instead, firms have made use of fire and rehire tactics despite receiving furlough support – and now both their own workers and the public more generally is worse off.
While a new ‘ultra long haul’ band has been introduced for journeys over 5,500 miles (the equivalent of London to Mexico City), these retrograde policies represent an abject failure to position Britain as a decarboniser ahead of COP26. This may not shock more seasoned observers of this Tory government, but it flies in the face of their recent green rhetoric.
Potentially even more alarming is the £21 billion in funding for roads in tandem with a scrapped rise in fuel duty. While lowering costs for the public is welcome, particularly at this moment, there were dozens of better ways to do this. Making car travel and domestic flights easier and more affordable while offering no similar incentives to rail or bus travellers makes it far harder to decarbonise our transport systems.
The Tories have signalled their intentions loud and clear—cars are going nowhere for the time being. If there was any intention to shift behaviour towards public transport, it wasn’t evident this week; Sunak’s Budget could scarcely have done a worse job if he’d tried.
The Budget also saw Sunak deliver a £4 billion tax cut to banks—at a time when the triple lock on state pensions was suspended, Universal Credit is cut by £20 per week, the furlough scheme comes to an end and when national insurance contributions and household bills are rising. The planned increase in council tax may also push many households further into poverty.
These regressive taxes will hit the most vulnerable in society hardest, and will largely cancel out the planned increase in minimum wage to £9.50 per hour. There has been much commentary about the levels of spending in this Budget, with one advisor to Keir Starmer even suggesting it was a ‘Labour Budget,’ but it will likely do little to address the runaway cost of living crisis.
The elephant in the room that both Sunak and Johnson are trying to tiptoe around is the failure of the private sector to deliver low costs and quality services. This, of course, is matched by their own outright ideological opposition to public ownership. Rather than drawing links between a broken public transport system—that sees billions of pounds siphoned from the wallets of ordinary people to enrich a few private companies—and Britain’s climate obligations, this Budget entrenches the inequalities that hinder any meaningful decarbonisation efforts and kicks the prospect of a green recovery from Covid into the long grass.
That means it’s up to the Labour Party to make the case for an alternative. In response to this Budget, the party should have come out with bold plans to remake Britain’s public transport system through sustained investment. Possibly even making public transport free in some places. It should have pledged its support for increased public ownership across the economy, including energy and utilities as a vital tool in a transformative Green New Deal.
Sadly, it seems to be moving in exactly the opposite direction. These measures, as well as creating millions of green jobs in sectors like transport and a National Care Service were a headline demand of Labour for a Green New Deal’s ‘Socialist Green New Deal’ motion which won the backing of members and unions at party conference. Keir Starmer and Rachel Reeves should take up these demands and commit to a radical alternative to Tory austerity as a matter of urgency.
At COP26, the world’s worst polluters will be looking for excuses to delay their decarbonisation, and Sunak’s myopic Budget may end up giving carte blanche to those present to continue business as usual. And let’s not forget what business as usual means in the long run: a planet substantially unfit for human habitation.
Locking millions of working people into car and domestic air transport may not have been the headline goal of this Budget, but it might well be among its most ruinous outcomes. When the history of this era is written, it will be remembered for trashing Britain’s track record on climate change just days before COP26 begins.