Spring Budget 2024

Baroness Sheehan Excerpts

Monday 18th March 2024 Lords Chamber

[Baroness Sheehan (LD)]

My Lords, my contribution to this debate will be from the perspective of my role as chair of the Environment and Climate Change Committee and will ask whether the measures in the Spring Budget demonstrate that this Government accept the need for action today if we are to avert far greater costs tomorrow, both to mitigate against climate change and to put in place measures to reduce its impact.

Just yesterday, I received in my inbox the FT “Climate Capital” newsletter, titled: “Are we the boiling frog?” The opening paragraph says:

“Since March 2023 oceans have begun to warm to previously unseen levels and now we’ve hit 365 days of consecutive daily highs. Every day of the past 12 months has set a global record. Let that sink in. The global average sea surface temperature tipped to the 21.2C record this week. While the cyclical El Niño warming effect of the Pacific Ocean is starting to show signs of weakening, global ocean temperatures remain unusually high”.


Jim Skea, chair of the UN body of scientists known as the Intergovernmental Panel on Climate Change—IPCC—said recently that the rise in the average global temperature over the past year meant that the world was in “unknown territory”.

Just as new heat records are reached, it is ironic that companies are taking a step back in terms of corporate accountability for global warming. The FT “Lex” column said a few days ago on 15 March:

“Corporate backsliding … can’t be justified”.


Companies, however, argue that Governments have not created the policy frameworks needed to achieve the emissions reductions. Do they have a point? Judging by the lack of ambition on green matters demonstrated by this Budget, I would say that they do.

Given the incontrovertible real-life data, not modelled forecasts, on ocean warming—to take just one key indicator of global warming—one would have thought that the opportunity presented by the Budget would work to deliver a financial environment that would grab the challenge of transforming our economy to make it fit for purpose to meet our statutory green commitments.

Why is this not the case? Economically it makes sense. The UK has already demonstrated that growth and decarbonisation can go hand in hand. We have reduced our greenhouse gas emissions by nearly half since 1990, while our GDP has increased by around 70%. More recent analysis by the Energy and Climate Change Intelligence Unit and CBI Economics found that the net-zero economy saw 9% growth in 2023 and that the economic opportunities created by the net-zero economy are benefitting all UK regions. Net-zero jobs are also more productive—around 1.6 times higher than the UK average.

The latest Climate Change Committee progress report warns that game-changing interventions from the US and Europe are leaving the UK behind. Global investment in clean energy alone is estimated to have risen to $1.7 trillion in 2023. The Government’s announced increase in the green industries growth accelerator of £120 million—taking the total to £1.1 billion—is just not in the same ballpark. A report by the UK Sustainable Investment and Finance Association found that 87% of businesses agree that policy changes to planning rules, grid capacity and energy price mechanisms could unlock £115 billion of investment and allow the UK to compete globally for green investment.

Let us not forget the risk of not protecting our natural capital. The Government’s third national adaptation programme outlined that, without early action to adapt to physical climate risks, the costs to England’s economy could be between 1% and 1.5% of GDP per annum by 2045. However, acting now to adapt to climate impacts could deliver up to £10 in net economic benefits for every £1 invested.

This Budget is a missed opportunity to lay the framework needed to invest in our future. The tax system is an important tool, alongside clear policy, regulation and spending, for supporting the transition to a low-carbon and nature-positive economy.

In conclusion, I have three questions for the Minister. First, will the Government reconsider producing a tax road map to make it clear to business and consumers that the fiscal trajectory supports net zero, allowing an adjustment period for where there will likely be greater tax costs? Secondly, how do the Government measure and evaluate the effect that taxes have on their environmental objectives? Thirdly, in the net-zero growth plan of March 2023, the Government said:

“HMRC will explore options to further strengthen the analytical approach to monitoring, evaluating, and quantifying the environmental impacts of tax measures, including their wider impacts”.


Can the Minister provide an update on this commitment?