The Budget: George Osborne to put growth ahead of ‘green crap’

The Chancellor is expected to give in to business demands to reduce penalties for high use of fossil fuel, and that worries environmental campaigners

George Osborne will use his Budget this week to insist he is building a “resilient economy” as he prepares to sweep away more “green crap” – or environmental taxes – to help British industry to sustain the recovery.

The Chancellor, buoyed by news of a dramatic upturn in growth which he will say justifies his continuing commitment to austerity, is expected to ease carbon taxes for energy-intensive manufacturers. Amid renewed talk of Mr Osborne positioning for the Tory leadership, the Chancellor’s moves against green taxes – or “green crap”, as the Prime Minister was alleged to have described them, will be aimed at delighted Conservative MPs as much as British industry.

Mr Osborne is expected to act on business demands to freeze the carbon price floor, which imposes a tax on companies for high use of fossil fuels and came in last April. The CBI says it is restricting the ability of the manufacturing sector to contribute to the recovery. The Chancellor could freeze the tax for as much as four years, a move which will alarm environmentalists because it will lead to increased CO2 emissions.

It follows a scaling back of green levies in the Autumn Statement in December, when Mr Osborne pledged to cut £50 from household energy bills by reducing the energy company obligation.

Yet his Budget on Wednesday will come just 24 hours before Britain takes the lead in Europe to cut carbon emissions across the EU by 40 per cent by 2030. Ed Davey’s presence, as a Liberal Democrat Energy Secretary at the European Council in Brussels, will underscore his party’s insistence that close co-operation with the EU is essential for tackling climate change – two things that are under threat from right-wing Conservative MPs. The meeting comes ahead of a major report from the Intergovernmental Panel on Climate Change on the latest scientific evidence on the issue.

Mr Osborne will argue that, despite promising signs of growth, the UK economy needs to be more balanced towards manufacturing exports.

A Treasury source said yesterday: “The Government’s long-term economic plan is dealing with Britain’s debts, helping businesses create jobs and delivering increased security and peace of mind for hard-working people. But the job is not done. Britain is still borrowing too much. To earn our way in the world we have to invest more and export more. We need to back businesses right across the country and in all industries.

“So the Budget next week will continue to tackle the country’s problems head on and will set out what we need to do to build a resilient economy.”

According to a poll for The Independent on Sunday today, a third of people think they will end up paying more tax if Labour wins the election than if the Conservatives win. Nearly six out of 10 voters believe the Government is not cutting spending in a fair way and 63 per cent believe that rich people stand to benefit more than people on middle incomes. Mr Cameron and Mr Osborne are more trusted to make the right decisions about the economy than Ed Miliband and Ed Balls.

Meanwhile, a report from the Social Economy Alliance, to be published tomorrow, presents alarming findings that Britons have poor levels of economic literacy. A survey for the organisation found that only 48 per cent of adults say they understand how the economy works, with 56 per cent saying they understand how their spending decisions affect their local economy, and 38 per cent saying business and economic  news stories are not relevant to them. The report, From the Bottom Up, argues for more awareness of social enterprises, run by citizens and communities, that hand economic power to grassroots.

With more widespread knowledge and understanding of basic economics, the report says that people can take action and have more control over how things are run in their communities. It follows an international study in 2010 which found that economic literacy in Britain is behind many industrialised nations.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Packaging Operatives

£7 - £8 per hour: Recruitment Genius: An opportunity has arisen for two indivi...

Ashdown Group: Trainee / Graduate Helpdesk Analyst

£20000 per annum: Ashdown Group: A highly reputable business is looking to rec...

Recruitment Genius: Estimator

£28000 per annum: Recruitment Genius: This company is a major supplier of buil...

Recruitment Genius: Software Developer

£28000 - £40000 per annum: Recruitment Genius: This is an exciting opportunity...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas