Enlarge imageBy Peter Griffiths
LONDON (Reuters) - Prime Minister Gordon Brown's promise of a "green recovery" budget to help the ailing economy may be no more than window-dressing because finances are too stretched to fund ambitious environmental plans.
With Britain deep in recession, Brown has billed next week's budget as a chance to promote environmentally-friendly policies that will create jobs and boost struggling businesses.
Analysts say the focus next week will be on help for renewable energy such as wind power, grants to make homes more energy efficient and perhaps a scheme to encourage drivers to trade in old cars for less polluting new models.
But while such promises may impress voters, Brown has little spare cash to throw at large-scale environmental projects as the budget deficit is expected to top 10 percent of GDP this fiscal year because of the economic downturn.
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"He hasn't got a lot of room for manoeuvre, it is window-dressing," said Alan Clarke, UK economist at BNP Paribas.
Other countries around the world have allocated far more of their fiscal stimulus packages to climate change investment, according to research published last month by British bank HSBC.
It estimated that Britain's share was 7 percent, compared to 12 percent in the United States, 13 percent in Germany and 34 percent in China.
Brown's Labour Party is trailing badly in the polls and desperately needs this year's budget to win it support before an election that must take place by June 2010.
His finance minister Alistair Darling is expected to set a target of creating 400,000 jobs in "green industries" in five years. But that only amounts to about 6,000 jobs each month, a figure that pales next to the record 138,400 rise in the number of people claiming unemployment benefit in February, Clarke added.
Mark Schofield, a tax partner at PricewaterhouseCoopers who specialises in climate change, said there was some merit in the idea that "green" investment could help the recovery, although the devil will be in the detail.
"Is it going to be something meaningful that can make a real difference?" he asked. "Finances are exceptionally tight."
'CLIMATE CATASTROPHE'
Environmental groups said they feared the budget would not live up to its "green" billing, robbing the British government of a chance to show leadership before crucial U.N. climate change talks in Copenhagen later this year.
"Only by dramatically ramping up support to renewable energy companies and cutting energy waste will we cut greenhouse gas emissions fast enough to avoid a climate catastrophe," said Friends of the Earth's Executive Director Andy Atkins.
Green Party spokesman John Whitelegg warned against "tokenism" and said Brown should close coal-fired power stations, build fewer roads and stop airport expansion.
"It is always disingenuous to put a greenish tinge on the budget," he added.
(Editing by Andy Bruce)
