Do the Government's fiscal rules constrain environmental policy?
Today MPs are launching a new inquiry into the Treasury's role in
shaping decisions on climate, nature and the environment across
government.
The cross-party Environmental Audit Committee will explore how
decisions made in the Treasury, the Government's central economic
department, influence the UK's overall approach to climate
change, nature loss and environmental sustainability, and ensure
that the UK remains on track to meet its legal obligations on the
environment.
The inquiry will also consider how the Treasury assesses the
long-term economic risks presented by climate change and
biodiversity loss. MPs will question whether climate and
sustainability are recognised as reducing risks to the UK economy
and contributing to the Government's growth agenda.
Specific questions the Committee may consider include:
- How fiscal rules and spending constraints affect investment
in climate and environmental policy
- How measures such as sustainability and natural capital
inform Treasury decisions, alongside traditional measures such as
gross domestic product (GDP)
- To what extent environmental duties, such as the
Environmental Principles Policy Statement, are applied in
Treasury policy decisions
- What progress the Government has made in implementing
recommendations from the Dasgupta Review on the Economics of
Biodiversity
Chair of the Environmental Audit Committee, MP, said:
“Decisions made in the Treasury have an extraordinary influence
on the environment. Without funding and support from the economic
heart of government, major initiatives such as species
protection, adaption to a changing climate, and the net zero
transition will falter.
Our new inquiry will explore how this department, so influential
across government, is considering the environment in its overall
approach and choices.
For instance: how do fiscal rules and spending limits impact
investment in tackling climate change? Do ministers recognise the
contribution of environmental policy towards growing the UK
economy, and appreciate the risks to our economic system if we
fail to act? Are there cases where Treasury decisions might
undermine its environmental aims?
Our inquiry is a vital opportunity to ask these and many more
questions, to hold Treasury ministers to account for their
enormous influence on the future of our precious environment.”
