First, we had John Prescott triumphant over his new bus lane on the M4 – the one that allegedly causes six-mile traffic jams for cars but gets buses through in 10 minutes. Then, it was reported last week, Tony Blair told him to get rid of it after he was held up in a queue. Not a consistent message, surely. So, what is going on? The conversion to the green agenda started when the Conservatives revised the planning legislation to stop out-of-town shopping centres. That was all about restricting car travel. A few years later, New Labour floated more regulation to slash the number of workplace parking spaces allowed at developments. Although the move was consistent with what had gone before, it was poorly received by the public and developers alike. If the government did not back-pedal then, it certainly freewheeled, and the idea fell by the wayside.
The government also committed itself to maintaining the Conservatives’ ever-increasing level of taxation on fuel – 5% above the rate of inflation. At first, the public appeared to see the sense in it. Raise the price of fuel, make it more costly to travel, and free up the roads. Great idea – as long as it applies to everyone else. The moment it hits me, it hurts.
Although there is no sign yet that the government is retreating, the sight of miles of truckers demonstrating against the fuel- and road-tax increases will surely not be encouraging New Labour to press ahead with this sort of policy. The public is clearly not behind it. You only have to look at the public’s scepticism over the euro and Blair’s increasing hesitancy on that issue to see what happens when public support wanes.
And the reason is that the government is going about it the wrong way. People respond better to carrots than sticks, but the government’s green policy has mostly been made up of sticks.
With a few notable exceptions, people do things to make money, save money or gain prestige. They try not to do things, even if you force them, if it makes their lives more difficult or more expensive. Green issues are no different.
If investors benefited from tax relief on their green expenditure, they would soon become committed environmentalists
You would have to be one brick short of a load to believe that there is no such thing as global warming. Even the experts agree that it is really happening, and that the consequences will be devastating. It is also not in dispute that the country’s resources are finite. Although the public generally believes this, only when these problems start to make a real impact will society be willing to countenance measures to stop the slide. The politicians will then be able to do something they rather like – leading from behind rather than the front. At that point, statutory measures could be introduced.
Until then, if the government wants us to change our behaviour, carrots will be needed. And the answer is tax breaks.
For example, at the moment, it is difficult to make an argument for paying a higher capital cost to produce a green building. Sometimes the whole-life cost study shows no benefit. Frequently, the developer of the building will not be running it. In these circumstances, there is no financial justification for incurring extra expenditure. If, however, investors in green buildings benefited from tax relief on their green expenditure, they would soon become committed environmentalists.
Perhaps part of the reason tax breaks have not already been introduced is the difficulty of defining and calculating how the system would work. But we already have a framework that could be applied pretty easily. For years, we have had a system of capital allowances that rewards investors in capital plant and equipment with tax breaks. This should be our model. How it will work, who can benefit, what would be eligible and how the allowances would be calculated are still to be decided – but these are not insoluble problems.
Green investors, industry and the country would benefit. And who else could? Answer – the quantity surveyor. We already deal with capital tax allowances and the means of maximising them. We know all about buildings, how they are put together and their costs. The green tax role would surely be an important part of the quantity surveying profession’s much-publicised move into management consultancy.
Andrew Hemsley is director of quantity surveying with Cyril Sweett.