This Coalition Government (UK) Must Use the Budget to “kick start the green economy”

Launching its 2011 Budget report ‘Budgetary Kick-start for a Green Economy’ the Environmental Industries Commission (EIC) argues that the Government’s March Budget is a major opportunity for the Coalition Government to build the foundations for a fundamental shift in our economic model - so that the UKs future economic well being and competitiveness is based on reaping the commercial benefits of protecting the environment.

EIC ‘s 2011 Budget Report calls for the Chancellor to implement two key strategies. Firstly, to put a price on pollution. George Osborne promised, before the Election, that this would be a Treasury priority when he argued “the Treasury should put a fair and predictable price on environmental externalities…the role for the Treasury is to ensure that these externalities are properly priced into the cost of doing things”. In doing this, a clear message would be sent to the market whilst generating tax revenues for encouraging investment in clean technologies.

Secondly, EIC recommends that the Treasury provide clear investment incentives to grow green businesses – funded through more pollution taxes (as recommended by, notably, the Green Fiscal Commission and the use of a new Tax Incremental Financing mechanism focused on:

- Energy Efficiency retrofitting of all public buildings
- The redevelopment of Brownfield land
- The construction of new waste infrastructure
- The implementation of Sustainable Urban Drainage systems.

Commenting on the launch of the Budget, Adrian Wilkes, Executive Chairman of The Environmental Industries Commission (EIC) said:

“It is important that the Government understands that environmental will be the backbone of any ‘green economy’. Our industry and EIC member companies are in a position to play a critical role in lifting the UK economy – delivering the double dividend of job creation across the UK while reducing environmental pollution.”

“This is not only the defining challenge of the coming decade, but the defining business opportunity for the Coalition Government.

“We are all aware that the current state of the economy as a massive problem. It has been tough for all sectors and a lot of our member companies have suffered. However, if the Government takes an innovative approach, and uses fiscal measures such as Tax Incremental Financing, this will send a strong signal to business. Our 230 Member companies are reporting that they are starting to see the flicker of light coming back. We don’t want to see the Government dampen these shards of light out by not considering all of its fiscal options”.

The Government’s own figures state that global environmental market place is currently worth £3.2 trillion and is growing at over 5% a year. The UK’s environmental industry is currently valued at £112 billion and employs one million people.

Adrian Wilkes pointed out that: “The continued success of the UK’s environmental industry will be the engine of growth on which the future of the UK economy depends. Land remediation of brownfield sites has an EU market potential is worth of £220 billion. The EIC Transport Pollution Control Group estimates that Low Emission Zones in the UK can create a market of £500 million and above whilst improving air quality. While the Carbon Trust has reported that £1 billion invested in energy efficiency can create 50,000 jobs and return £3 billion to the UK economy.

The Treasury must realise that these are markets with real jobs and growth potential in which the UK can and must lead from today”.