MPs urge Government to make green policies central to post-Covid recovery
Updated: Mar 23
A cross-party group of MPs has urged the government to place a “green recovery” at the centre of attempts to “grow back better” from the Covid-19 pandemic. The plea comes in Growing Back Better: Putting nature and net zero at the heart of the economic recovery, a report published on February 17th by the Environmental Audit Committee (EAC).
The EAC is a cross-party group of 16 MPs which, since 1997, has had a remit to review and audit government departments’ policies and programmes against sustainable development and environmental targets. Philip Dunne, chairman of the EAC, advises that ministers should treat “the Covid-19 crisis…as a wake-up call. It is a symptom of a growing ecological emergency. The economic recovery will shape our national economy for decades to come and it is crucial that tackling climate change and restoring nature is at its core”.
The report views the Prime Minister’s 10-Point Plan for a “green industrial revolution” as progress in the right direction but recommends measures to make the plan more “investible” for industry. The government is called upon to “front-load its investment in energy efficiency, the circular economy, climate adaption and nature recovery to counter rising employment by creating green jobs”.
Among the specific recommendations are:
The Chancellor should reduce VAT on low-carbon energy efficiency measures and green home upgrades to incentivise such refits and improvements. This measure could mean a revisit and possible reversal of the decision taken in 2019 to increase VAT on the installation of a range of low-carbon products – such as solar panels – from 5% to 20%.
The rate of VAT on repair services and recycled products should also be reduced to encourage a more circular economy.
Tax incentives should be introduced to increase the transition to electric vehicles.
The much-maligned Green Homes Grant scheme should be over-hauled. Lauded at its introduction, the scheme which allocated £2bn for energy-efficient improvements to homes is now floundering following a decision not to carry forward the £1.5bn which remains unclaimed.
The government should begin scoping work on a carbon tax to incentivise low-carbon changes across the whole economy.
The Bank of England is called upon to align its quantitative easing programme in line with the Paris Agreement. It is also recommended that the Bank of England require companies seeking relief from the Covid Corporate Financing Facility or any future equivalents to publish their climate-related financial disclosures.
The details of the government’s proposed Hydrogen Strategy should be revealed without further delay and acted upon to offer incentives for private investment in hydrogen production.
The recommendations in the report have been welcomed by Greenpeace, the Green Alliance and trade associations representing various strands of the renewables sector. The judicious inclusion of references to COP26, the upcoming UN Climate Summit, should ensure that the report will be considered by the government.