On the 30th of October, Chancellor of the Exchequer Rachel Reeves made her first budget statement to the House of Commons in Parliament. This was the first Labour budget since 2009, and was the first ever to be created and delivered by a woman. 

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The budget is an important political moment of the year, particularly for the Chancellor. It sets out what the government wants to do over the next year and beyond, where their political priorities are, and - crucially - how much they think this will cost, and how they intend to pay for this. There are three major ways the UK government collects revenue to pay for its spending; returns of government-owned investments, taxation, and borrowing.

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Labour said they would “fix the foundations” if elected, a claim they have frequently repeated since. They claim to have found the government finances far worse than expected, with a  £22 billion “black hole” of uncosted spending, rising to £40 billion to protect departments from real-term cuts. This is the framing Rachel Reeves has chosen for decisions made in the budget, which was one of significant increases to government spending, with day-to-day spending increases of £40 billion paid for largely by significant National Insurance rises for businesses, and tens of billions in investment paid for largely through borrowing. There were big budget increases for the NHS and Education, as well as significant investment announced for house building, and renewable energy. 

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In the General Election, Labour promised not to raise tax on working people,  to only borrow to invest, and that national debt would fall in their tenure. Labour argue that they have fulfilled these promises in the budget, with no changes to income tax or national insurance for employees, and a change to debt rules which allows greater investment without debt rising. However, some feel that they have broken at least the spirit of these promises, with tax rises in other areas, including inheritance tax (in particular for farming) and NI for employers which may impact hiring and wages. 

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Much focus from the press and government following the budget has been on its tax implications, and the importance of the spending decisions to fix public services. While spend, tax, and spending allocation in the budget will continue to make headlines, let’s take a closer look at what was committed to from a nature and climate perspective.

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• The Department for Energy Security and Net Zero will see its capital budget rise by up to 25 per cent in real terms over the next five years, which will allow it to better deliver on it’s missions of green energy, and securing Net Zero by 2050

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• The chancellor reconfirmed that GB energy will be set up, and provided over £8 billion of public money this parliament to “own and invest in clean power projects in regions across the UK”, owned by the British People. This funding will come from the National Wealth fund, which, with a nearly £28 billion budget, will also invest in Net Zero Projects of its own accord. While Great British Energy is an exciting and promising project, publicly available details on its powers, and exactly how it will pursue its missions are still sparse, and we expect to see more pragmatic detail from the Government shortly. 

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• Government investment in green technologies included a recommitment of £22 billion for carbon capture and storage over 25 years, and £2 billion in funding for 11 electrolytic hydrogen production projects across the country. While advocates of these technologies are pleased by considerable funding and commitment, others argue that both these technologies are as yet unproven or costly at a large scale, and that this money would have been better spent on proven approaches now, such as moving to heat pumps, and techniques for reducing our carbon production, rather than capture, which doesn’t tackle the core issue. Green hydrogen is seen by some as a technique for current gas and oil products to remain influential in the future energy market, as opposed to the most climate and cost friendly approach to heating.

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• The government has removed the oil and gas industry investment allowance, and introduced a higher rate on the Energy Profits Levy.

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• On Transport, the department's budget was slightly reduced, but there was notable support for large public transport projects across the country, £1 billion pounds allocated for buses, 100 million for active travel, and support to encourage e-vehicle take-up. However, the cap on fuel duty, which has yet again been extended, which coupled with raises to train fares, and the bus fare cap rising to £3, skews the market towards more polluting forms of travel.

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• Farming received significant attention in and following the budget, largely for the changes in exemptions to inheritance tax for farms. .From an environmental perspective, there was a 38% increase in funding for Environmental Land Management Schemes (ELM) to £1.8 billion, and 200 million for tree planting and peatland restoration, which will store carbon naturally, improve flood resistance, and improve water quality in rivers and streams. 

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• The government committed £3.4 billion for their Warm Home Plans before 2029, to upgrade the UK’s energy leaking housing stock, and reduce energy bills, help tackle fuel poverty and meet climate targets. However, this is unlikely to be enough funding to retrofit millions of poorly insulated homes adequately.

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Many of these commitments have received praise from the environmental sector, and rightly so: they are important steps in the right direction, that better understand the need for action on climate and nature. However this was not a “green budget” The environment did not take centre stage in the Chancellor's speech, nor in their press releases afterwards. Interestingly, nature and climate came up only when a policy was explicitly environmentally focused.There were several opportunities to tout a policy's potential environmental benefits without extra spending, such as the funding for a new tram system in West Yorkshire, which will take polluting vehicles off the road. Yet the choice to avoid mentioning climate and nature benefits and importance outside of explicitly environmental policy suggests the government is still concerned with public reception to green spending, and perhaps shows this government has a way to go in truly understanding the power and importance of green investment. 

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This is the first budget of the new Labour Government, but not the last - assuming politics as normal, we would expect at least 4 more before the next General Election. While there were some meaningful steps for climate and nature in this budget, it is of course vital that we see them go further, and faster to protect our planet and future’s. Making government and elected representatives aware of the public mandate for climate and nature focussed policy is a vital part of ensuring that next year's budget, and those following, are bolder, and more explicit about the scale and severity of the crisis we face, and the policy opportunities available to government to tackle the crisis.

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If you are interested in taking this public mandate to your elected representatives, so they are representing the importance of action for climate and nature in their work as your local politician, you can sign up for one of Hope for the Future’s upcoming training sessions here, or reach out for direct support from our dedicated team here.

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