16 December 2004 NEW INQUIRY

16 December 2004 NEW INQUIRY

Pre-Budget 2004:  the road ahead

As part of its regular appraisal of the budgetary process and the progress made by the Treasury in placing environmental objectives at the heart of its fiscal policies, the Environment Audit Committee is launching today a new inquiry on the Government's Pre-Budget Report 2004.   This year's inquiry will focus on three issues:

(A) PBR 2004 and SR 2004.   What new policy measures and initiatives to address environmental impacts does PBR 2004 contain?  How adequate are they in terms of addressing the environmental challenges we face?   Do the new PSA targets in SR 2004 adequately reflect environmental priorities?   How much of a real increase in funding for those priorities has actually been made available, and is the level of funding now adequate?

(B) The Treasury's overall fiscal strategy.   In view of the fact that we are approaching the end of the Government's second term, what overall progress has the Treasury made since 2001 against the agenda set out in its Statement of Intent on Environmental Taxation in 1997?    What successes and failures have there been?  Has the Treasury developed an adequate strategy to implement its environmental PSA objective?   How could its approach be improved? (See note 2 below.)

(C) Environmental appraisals and Regulatory Impact Assessments.   Departments are required to screen and appraise the environmental impacts of their policies.  However, over the last four years, the focus appears to have shifted from separate environmental appraisals to an emphasis on integrated policy appraisals.   More recently, the Government appears to have taken the view that Regulatory Impact Assessments should constitute the formal means for assessing environmental impacts in relation to other impacts.    As highlighted in previous Committee reports (see note 3 below), there is also a wide range of overlapping and potentially conflicting guidance on appraisal.   How adequate is the current approach to appraisal, in particular the reliance on RIAs, as a vehicle for capturing all environmental costs and benefits and for balancing these against economic and social impacts?   In what ways can departmental approaches to appraisal (including the appraisals in the Pre-Budget Report itself) be improved?

The Committee would welcome views on any or all of the above issues.  It expects to take oral evidence on this inquiry In February 2005 and publish a report in March.   In view of the fact that the Government has now acknowledged the claims made by the Committee since 2003 that the UK Climate Change Strategy is seriously off course, the Committee's report will also include some consideration of this topic in order to feed into the current review of the Strategy.

Written evidence should be sent to the Committee by Friday 21st  January 2005,  preferably by e-mail to eacom@parliament.uk (with a hard copy by post).   A brief guidance note on the preparation and submission of evidence is available on the Committee's web pages.  For further information on the Committee's inquiry, please telephone 020-7219-1378.

  Notes for Editors

1. Since its inception in 1997, the Environmental Audit Committee has regularly reviewed the progress made by the Treasury in placing environmental objectives at the heart of its fiscal policies.  In doing so, it has taken as one of its reference points the Statement of Intent on Environmental Taxation, which the Treasury released in July 1997.  This stated that the Government would "over time...reform the tax system to increase incentives to reduce environmental damage." 

2. With regard to the Treasury's approach to developing an environmental fiscal strategy, many previous reports published by the Committee comment on aspects of this topic.   Readers are referred to the Committee's Tenth Report of 2003-04,  Budget 2004 and Energy, HC 490, and to previous reports in this series - in particular its Fourth Report of 2002-03, Pre-Budget Report 2002,  HC 167 (paragraphs 44ff) which contains a more general critique of the Treasury's approach. 

3. The Committee has also commented on appraisal in various previous reports - notably, its Thirteenth Report of 2002-03, Greening Government 2003, HC 961 (paragraphs 35 to 45), and its Thirteenth Report of 2003-04, The Sustainable Development Strategy:  Illusion or Reality?, HC 624   (paragraphs 94 to 99).    The Committee has also expressed its concern about the increasing reliance which Government appears to be placing on monetary evaluations of environmental impacts in its Fourth Report of Session 2002-03, Pre-Budget Report 2002, HC 167 (paragraphs 56 to 62).  

4. Details of all the Committee's press releases and inquiries, together with its Reports, oral evidence and other publications, are available on the Committee's Internet home page, which can be found at the committee's homepage.