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MPs urge bigger green stimulus

16th March 2009

The Budget should include a "much bigger and more coherent package of green fiscal stimulus", MPs have said.

A report from the Commons environmental audit committee has also urged chancellor Alistair Darling to start laying the foundations for sustainable economic growth when he delivers his Commons statement on April 22.

And reviewing the policies set out in last November's pre-Budget report, they said that most of the £535m in the government spending package is not new money.

The committee also wants the Treasury to detail the net impact on carbon emissions of its entire £3bn package of fiscal stimulus measures.

And business secretary Lord Mandelson is urged to detail what 'green strings' are to be attached to the £2.3bn loans package for UK car manufacturers.

On environmentally friendly taxes, the committee found that in real terms their revenue has gone down slightly since 1998 while revenue from all taxation has increased by around 30 per cent.

Committee chairman Tim Yeo said stimulus measures "provide an invaluable opportunity for the Treasury to drive the kind of change required to build a sustainable modern economy".

"The upcoming Budget is a real test of the government's commitment to its own climate change policies," he added.

"Yet the measures in the pre-Budget report show the Treasury lacks the consistency and boldness of purpose required.

"The Treasury has announced very little new money for green investments."

Yeo added that "meeting our climate change targets will require a step-change in funding for the low carbon energy sector, especially when the financial crisis has led to a shortage of capital".

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