The Green Budget - At a glance

Economic backdrop

Chancellor Alistair Darling says the UK is facing the "most serious global economic turmoil for 60 years", and notes that the global economy is expected to contract this year for the first time since the Second World War.

He also confirms that UK exports have fallen 14 per cent this year, though argues other countries are faring worse.

Darling predicts UK GDP will shrink 3.5 per cent for the year as a whole, but insists he expects the economy will "start growing again towards the end of this year", forecasting growth of 1.25 per cent for 2010 and 3.5 per cent for 2011.

He says tax revenue as share of GDP has fallen 1.2 per cent. Borrowing will hit £173bn in 2010-2011, or 12 per cent of GDP. It will then fall to £140bn, then £118bn, then £97bn each year in the run-up to 2013-2014.

However, despite the recession, Darling vows to protect investment in schools, hospitals and green initiatives.

He also predicts the recovery will be led by investment in "low carbon, advance manufacturing and communications" technologies, which will be as important as financial services.

Skills

Funding for skills development and training subsidies to increase by £260m with a focus on "sectors with strong future demand". Clean tech looks sure to be included in some form.

Car Scrappage Scheme

As widely trailed, Darling confirms that the government will launch a scrappage scheme from next month. Motorists trading cars that are more than 10 years old will receive £2,000 to help boost sales and encourage people to switch to more efficient vehicles. The scheme will be temporary and will run until March 2010.

Darling says that Lord Mandelson will provide more details shortly, but it appears the incentive will be available regardless of the new car a motorist buys. As such the move is likely to be widely criticised by green groups who have argued that despite car industry claims to the contrary such a scheme will deliver negligible environmental benefits.

Clean tech investment

Darling says he will spend £1bn on environmental initiatives, helping in the fight against climate change and creating "green-collar jobs".

The money will be raised through sale of government property worth £16bn over three years from 2012.

There is also a raft of green investment commitments, including a £750m fund for emerging technologies, £405m for green manufacturing and £4bn in new capital investment from the European Investment Bank.

Carbon budget

The world's first carbon budget is unveiled, promising emission cuts of 34 per cent by 2020. Darling hails the move as a "landmark step" and the cuts are well ahead of the 20 per cent promised at EU level. However, it is at the low end of the cuts recommended by the climate change committee and is likely to be criticised as too little by green groups.

Green buildings

£500m will go into house building and an additional £435m will be invested in energy efficiency measures for homes and public and private sector buildings.

Enhanced Capital Allowances

The Chancellor announces that he is to double capital allowances – tax breaks that apply to a large range of energy efficient industrial equipment. He claims the move will result in enhanced tax relief of £50bn this year.

Offshore wind

The Chancellor says he wants to create a new "North Sea energy hub", through gas storage, carbon capture and offshore wind. He acknowledges the challenges faced by the offshore wind and vows to deliver an extra £525m in new financial support for the sector through the Renewables Obligation subsidy scheme.

Darling says he is "confident" the move will allow planned projects to proceed, but the sums involved fall well short of the £2bn asked for by the industry.

Carbon Capture and Storage

Darling confirms plans for a further two CCS demonstration plants, but in a surprise move says there could be another two on top of that. He says there will be a new funding mechanism for the projects, but there are no details included in the speech.

Combined Heat and Power

Highly efficient combined heat and power plants are to be exempted from the climate change levy from 2013. The Chancellor predicts this will bring forward £2.5bn of investment.