‘Green New Deal’ Fails to Get Funding in Britain, Lawmakers Say

By Alex Morales

March 16 (Bloomberg) -- Britain’s spending on public transportation and home insulation falls short of a “Green New Deal” needed to forge environmentally friendly growth, a committee of lawmakers said.

A 535-million-pound ($750 million) “green stimulus” announced by Chancellor of the Exchequer Alistair Darling in November includes only 100 million pounds of new funds, the Environmental Audit Committee said in a report today critical of the plan. Most of the funds are merely accelerated spending on railways and energy efficiency already pledged in future budgets.

“Taking money out of a budget two years down the road and bringing it forward to this year doesn’t really count as a ‘green new deal’ at all,” said committee Chairman Tim Yeo, in an interview. “That’s very disappointing.”

In the U.S., President Barack Obama has pledged to spend $150 billion over 10 years to combat climate change and create “green” jobs. Alluding to the New Deal spending program to bring that nation out of the Great Depression in the 1930s, Yeo said Britain risks lagging behind in developing clean technologies and promoting growth that cuts reliance on emitting greenhouse gases blamed for global warming.

“What Obama is doing is right, and it’s what other countries will be doing as well,” said Yeo, a member of the opposition Conservative Party. “That’s right not just for short- term economic reasons, it’s right for medium-term environmental reasons too, and Britain is going to look like it’s lagging.”

The committee recommended the government adopt a target for the proportion of the U.K.’s economic output that should be spent on a “green” stimulus, suggesting 0.8 percent -- or about 11 billion pounds a year -- as a starting point. That stimulus would include other investments, such as subsidies for wind energy.

Energy Efficiency

The 16-person panel, which includes nine members of the ruling Labour Party, said the government’s priority for a green stimulus should be to increase the scale and speed of programs to make existing buildings more energy-efficient.

The Treasury responded by saying that the money included in November’s report was “only a very small part” of the government’s spending on environmental measures.

“It would be wrong to mix up the 535 million pounds of green stimulus that was in the pre-budget report with the 50 billion pounds that we think is a conservative estimate of future investment we are putting into greening our economy,” the Treasury said in its reply, which is included in the committee’s report.

The committee also criticized Darling’s decision to retract a commitment to tax airlines on each flight rather than on each passenger and his withdrawal of another measure that would have increased taxes on higher-emitting vehicles that have already been purchased.

“The use of tax to encourage greener choices has not been fully grasped, and that goes back the last three or four years,” Yeo said. “It was even more important to do it this year, and they haven’t done it.”

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net.