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Corporate Leaders Groups

Business leadership for a climate neutral economy

17 March 2016 – The Budget for the next generation missed the opportunity to inspire a low carbon vision for the UK despite having some positive steps in the right direction.

The Chancellor presented the 2016 Budget as a chance to ‘act now, so we don’t pay later,’ and a ‘budget for the next generation,’ yet he then missed his chance to seize on the optimism and ambition of the Paris Agreement for the UK’s low carbon transition. Despite the long-term perspective that housed the Chancellor’s speech, climate and Paris failed to get a mention.

The Chancellor’s strong references to planning for the long term and for the vitality of the next generation should have been a natural link to the UK’s need to deal positively with climate change. To encourage and enable the scale of business and investor belief that will drive a just transition into a positive, low carbon future means the UK has to take a long-term perspective and inspire confidence. The Chancellor gave welcome news on the reformation of the business energy efficiency tax landscape and a grand hint that National Infrastructure Commission advice on smart energy usage may be followed but undermined this with the continuation of misaligned support for the UK oil and gas industry.

The Prince of Wales’s Corporate Leaders Group (CLG) would welcome the further investments that were announced to support renewable energy innovation and the rise in insurance premium that allows a £700 million boost to the UK’s resilience with the building of much-needed flood defences. CLG members are encouraged by the simplification of the tax regime and the continued commitment to the mandatory reporting of greenhouse gases but business leaders are still unclear about the size of the Levy Control Framework in the future and commitments to increase energy efficiency. More clarification will be needed this year as the Government make their decision on the fifth Carbon Budget, consider the implications of a net-zero target, and refreshed their emissions reduction plan in the Autumn.   

The most interesting story was not what was said but what wasn’t, as the Government has still to set out how it will raise its game and respond to the clear direction of travel given by the Paris Agreement whilst meeting the legally binding targets in the Climate Change Act. This is particularly vital and a surprising omission by the Chancellor given the welcome leadership shown by the UK government’s recent commitment to a long-term, net-zero carbon target.

Prior to the Budget, the CLG wrote to the Chancellor specifically asking him to be explicit about the UK’s ambition to implement the Paris Agreement and how the UK would meet the goals of the commitments made in December. However, this long-term vision and strategy were both missing from his budget despite the fact the Government appeared to take its first step towards enshrining the Paris goal of a zero emissions future into law earlier this week.   

The CLG recognises the challenging timetable for clarification of these issues during this year and continues to extend its invitation to work with the government and to help bring the voice of business to the deliberations over the coming months.

Eliot Whittington, Deputy Director CLG, 17 March 2016