As heavily trailed in advance, the Budget focused primarily on laying out further support measures for businesses and workers with the Chancellor pledging to continue to do “whatever it takes.” There were no major shocks but further fiscal measures to be revealed with a series of tax consultations.
With the pandemic still holding the UK economy in its grip, the budget was never going to be about radical change, but there were some announcements that start to play into the ‘build back better & greener’ theme.
Key announcements on sustainable finance
National Infrastructure Bank: The budget saw confirmation of the UK’s National Infrastructure Bank, which will have an initial capitalisation of £12bn. A core objective of the Bank will be to help the UK meet its 2050 net-zero target. The Bank is expected to begin operating later this Spring in an interim capacity.
Sovereign green bonds: The Budget outlined government’s plans to issue ‘green gilts’ this summer with a framework, outlining the types of spending to be financed. Interestingly for Ethical Futures clients, The Chancellor argued the UK would ‘go further’ by announcing retail savings products as part of this to allow savers to support green projects.
New remit for the Monetary Policy Committee: The Chancellor said the MPC’s remit would be updated to reflect the importance of sustainability and the net-zero transition.
Review of carbon markets: There will be a new taskforce, led by former CEO of the London Stock Exchange Group, Dame Clara Fuse, to help position the UK as a leading global market for voluntary carbon offsets.
Pensions and savings: There will be a consultation on whether certain costs within the 0.75% charge cap for default pension schemes impact their ability to invest in certain asset classes, such as long term infrastructure, that might contribute more to create sustainable impact.
Investment in the ‘green economy': Separate to the National Infrastructure Bank, there appeared to be fewer immediate funding commitments for the ‘green economy’; for example, on electric vehicle charging networks or home insulation.