It was touted, now over a year ago, that the Green New Deal as it was so-called, could address employment problems and kick start a drive towards a flourishing green sector in Britain, helping the transition to a low carbon economy. With the economic downturn placing long-term goals behind short term solutions in the estimations of a substantial many, the growth of a green sector has fallen – in some senses quite understandably – into the shade.

Nonetheless, its important to remember that a green sector is a necessary engine for sustainable growth in alternative energy, green initiatives, and a reduction of CO2 emissions in the UK.

After some time out of the media limelight, the concept of a strong and developed green sector has once again reached the news thanks to announcements made in Chancellor Alistair Darling’s 2009 pre-budget report.

Green Sector Boosted by Pre-Budget Report Tax Breaks – The Basics

In an effort to encourage investment into a growing green sector, New Labour have – through Darling’s pre budget report, made public earlier this month – granted tax exemptions for income generated through several green measures. Growthbusiness.co.uk neatly summarised the gains that the green sector will receive as a result of the next budget:

“Income generated by small-scale renewable energy facilities (such as wind turbines or solar panels on your roof) is to be tax-free. A ‘boiler scrappage’ scheme is to be launched to encourage people to replace inefficient old boilers with greener models. Company car tax is to be abolished for electric cars and there is a renewed commitment to installing smart meters in homes by 2010 and providing funding for home insulation”.

Thanks to such exemptions, the interest generated around a strong UK green sector should grow in coming months, and the encouragement that government has given for such a growth is a promising factor indeed.

Whilst the pre-budget report has encountered some criticism for its attempts to generate revenue in difficult times – the National Insurance payment being increased is a prime example – it is certainly welcome to see that New Labour are prepared to back initiatives that will increase the presence of a green sector in the British economy.