Chancellor Rishi Sunak has used his Budget to announce a range of green measures, including plans for the UK’s first sovereign green savings bond, a reaffirmation of an introduction of a plastic packaging tax from April 2022 and a pledge to make the City of London a leader for carbon offset markets.
Pledging a commitment to green growth, the Chancellor said the UK will launch a “world-first” sovereign green savings bond for retailer investors, allowing savers to help drive the country’s transition to net zero by 2050 by investing in bonds through the state-owned savings bank NS&I.
Sunak said that the Government had “a real commitment to create jobs where people are”, as his main Budget speech focused on Government plans to provide Coronavirus-related job protection support until September for millions of people unable to work and plans to boost the economy.
He also outlined plans for an “investment-led recovery” in which sustainable businesses have a key role to play.
In the Budget document published after the Chancellor announced the Budget to Parliament, HMRC reiterated that the UK’s plastic packaging tax will be £200 per tonne from April 2022.
Any packaging containing less than 30% recycled content will be subject to the tax.
HMRC explained that “legislation will be introduced in Finance Bill 2021 to establish a plastic packaging Tax”.
Key features from this Bill include:
· the registration threshold of 10 tonnes of plastic packaging manufactured in or imported into the UK per annum
· the scope of the tax by definition of the type of taxable product and recycled content
· the exemption for manufacturers and importers of small quantities of plastic packaging
· who will be liable to pay the tax and need to register with HMRC
· how the tax will be collected, recovered and enforced
· how the tax will be relieved on exports
Elsewhere, Sunak also announced a spring launch of a new £12 billion Infrastructure Bank. The bank will offer infrastructure loans to projects in sectors such as renewable energy, carbon capture and storage and transportation.
He added that he wanted to make the City a global leader for voluntary high quality carbon offset markets.
The Chancellor has also announced plans for a £57m commitment to support cleantech and low-carbon energy jobs in Scotland. The Aberdeen Energy Transition Zone aims to transform North-east Scotland into a globally competitive hub for cleaner energies such as offshore wind and hydrogen.
Higginson Strategy’s Head of Research, Liz Gyekye, said: ‘The levy to help encourage the use of recycled plastic in packaging should be welcomed. However, the Chancellor’s green announcements stop short of getting full marks because the Budget makes no mention on whether the Green Homes Grant will continue to get funding in order to enable householders to make energy improvements to their homes.’
Founder John Higginson said: ‘This Budget was all about keeping the economy on course and not spooking the markets. But the massive propping up of the economy will have to be paid for at some point. The 2024 general election will be fought on tax cuts vs public spending.’