Autumn Statement 2016: The green business reaction

Did new Chancellor Philip Hammond provide a Christmas cracker of an Autumn Statement that delivered on the Government's green promises? Or was this another cold turkey that once again failed to provide the green pledges we were all hoping for? Here's the full industry reaction, as it comes in...

Chancellor Hammond announced the 2016 Autumn Statement at 12:30pm today

Chancellor Hammond announced the 2016 Autumn Statement at 12:30pm today

Taking place at 12:30pm today (23 November), the Autumn Statement provided Chancellor Hammond with a golden opportunity to answer a number of key green policy questions.

Positive developments came in the form of low-carbon transport funding and a continued cap on the Carbon Floor Price until 2020.

But what about the major green issues affecting the business community? Did Hammond unveil a low-carbon Industrial Strategy and confirm post-Brexit support for renewables? What about an end to tax breaks for the oil and gas sector? Surely, the recently-ratified Paris Agreement got a mention?

Unfortunately not. Ultimately, this was another Budget that failed to rise to the challenge set by the ambitious Paris deal, and edie readers - while welcoming some of the announcements - are again left with more questions than answers.

Read our speech summary for green businesses here.

Autumn Statement: The green business reaction

Alan Whitehead, Shadow Energy and Climate Change Minister: 

“The Autumn Statement was widely trailed as taking action on energy prices by placing a cap or similar on tariffs, but the Chancellor has announced merely that there will be an enquiry into energy over the next few months “to make sure they are functioning fairly for all consumers” – something that has already happened with the inadequate Competition and Markets Authority enquiry. This is a completely inadequate response to a real issue of the overcharging of ‘sticky’ customers by energy companies.

"The Statement made clear that the Government is still considering the next steps for the Levy Control Framework, further delaying any indication about its future until Budget 2017. This is yet another delay in giving the industry the certainty it needs to get investments under way. I was pleased, however, to see that – contrary to briefing ahead of the Statement – the Carbon Floor Price has been maintained.

"The Chancellor announced that he is abandoning his predecessor’s stance of not borrowing to secure investment in infrastructure, but he has made no mention of investment in the key area of upgrading the energy efficiency of our housing stock. This could have been a win-win – investment that reduces carbon dioxide emissions from homes, reduces fuel bills for householders and creates thousands of jobs.”

Dr Jonathan Marshall, energy analyst at the Energy and Climate Intelligence Unit (ECIU)

“Despite claiming to provide certainty to businesses, Mr Hammond has failed to offer any clarity for the energy industry beyond the short term. Freezing the carbon price support to 2020 was already announced in the March Budget, while deciding on the future of the levy control framework has been delayed until next year.

“Considering the long-term nature of energy investments, clarity more than three years into the future is vital for the industry. Vast swathes of the UK’s generating capacity are reaching retirement age, and long-term clarity on carbon pricing would provide investors with the platform to back much needed new low-carbon equipment.

“The sector was looking to see the fate of the carbon tax beyond the end of this decade, as promised in the March budget, while knowledge of the degree of support available for new capacity via the levy control framework is essential for businesses. This statement is likely to see investment in new capacity continue at glacial pace.”

Trevor Hutchings, director of advocacy, WWF-UK

“An ever-shrinking natural environment, climate change, air and water pollution, and declining wildlife populations present our economy with risks and costs that could run into billions.  This statement was an opportunity for the Chancellor to minimise these costs, and to position the economy to take advantage of huge international markets in low-carbon energy and technologies.

“It’s therefore unfortunate that the Chancellor did not have more to say about green growth.  Priorities should have included stronger support for renewables through the Industrial Strategy, and backing for a robust Emissions Reduction Plan. Investment in the country’s natural assets could have cost-effectively reduced flooding and healthcare costs and protected UK business from growing problems of water scarcity. The significant investments in infrastructure he did outline need to be designed to avoid, minimise or offset environmental damage.”

Dr Doug Parr, chief scientist, Greenpeace

“It is good news the Government has heeded the call to provide certainty and stability for investors and business. This is a policy that needs to stay in place until the historic coal phaseout is locked in and renewables plus battery storage and interconnectors are lined up to fill the gap in the long run.”

“The further support for EVs and tax break for charging points demonstrates that the government is thinking about a transition to clean vehicles . While it’s a step in the right direction, its importance to recognise that  meeting climate targets agreed in Paris and protecting our health from air pollution, all new cars need to be electric by 2030. Any future investments in clean technology and transport systems need to match this ambition.”

Paul Barwell, chief exeuctive, Solar Trade Association (STA)

“We welcome the additional funding for infrastructure & electric vehicles - a “smart” energy system will deliver enormous savings to business and consumers. It is also good news that there is no cut to the Carbon Price support, and we look forward to working with the Government over their emissions reduction plan and the future of the Levy Control Framework. However proposed business rate rises risk undermining an industry that is already adjusting to a low-support framework, and will make many systems uneconomical.”

Martin Baxter, chief policy advisor, IEMA

“Today’s Autumn Statement has provided some level of confidence for business in terms of investment at a time of uncertainty, which is a welcome move. Investment in infrastructure, industry and skills is a strong trinity of themes that together, will bolster the UK’s resilience, competitively and productivity.

Given this direction, we are looking to the government to ensure that environment and sustainability skills are absolutely central to this programme. We are disappointed that this hasn’t thus far appeared to be prominent. We look forward to seeing this come through in the imminent industrial strategy, the emissions reduction plan and the 25-year environment plan.”

“Having said that, this statement has done little else to demonstrate Government’s commitment to environment and sustainability issues. Could do better!”

Alan Whitehead, Shadow Energy and Climate Change Minister

“The Autumn Statement was widely trailed as taking action on energy prices by placing a cap or similar on tariffs, but the Chancellor has announced merely that there will be an enquiry into energy over the next few months “to make sure they are functioning fairly for all consumers” – something that has already happened with the inadequate Competition and Markets Authority enquiry. This is a completely inadequate response to a real issue of the overcharging of ‘sticky’ customers by energy companies.

The Statement made clear that the Government is still considering the next steps for the Levy Control Framework, further delaying any indication about its future until Budget 2017. This is yet another delay in giving the industry the certainty it needs to get investments under way. I was pleased, however, to see that – contrary to briefing ahead of the Statement – the Carbon Floor Price has been maintained.

The Chancellor announced that he is abandoning his predecessor’s stance of not borrowing to secure investment in infrastructure, but he has made no mention of investment in the key area of upgrading the energy efficiency of our housing stock. This could have been a win-win – investment that reduces carbon dioxide emissions from homes, reduces fuel bills for householders and creates thousands of jobs.”

Liz Hutchins, senior campaigner, Friends of the Earth (FoE)

“The Chancellor is pootling along in the slow lane, when the UK needs to be on the fast track to a low-carbon economy. With Donald Trump appointing climate deniers and oil lobbyists to his transition team, this is a huge missed opportunity for the UK to show the global leadership and urgency needed to protect our planet.

“Investment in EVs is welcome – but this over-shadowed by the huge sums committed to roads which will cause more pollution. The government must do far more to make the UK the global low carbon powerhouse we so urgently need – the political will is still sadly lacking.

“More homes are urgently needed, but they must be built to the highest environmental standards and sited in the right locations – not flood plains. New houses must be super-energy efficient, so that people’s hard-earned cash is spent properly heating their homes, instead of the planet. We need a housing policy fit for the challenges of the 21st century – not a short term fix that simply stores up more problems for the future.”

Nick Molho, executive director of the Aldersgate Group

"It is positive to see greater focus from Government on linking up local authorities with businesses with further funding provided to LEPs. The new industrial strategy must allow the Government to play a greater co-ordination role to link up businesses with the growing low carbon opportunities taking place across Britain and grow the UK’s low carbon supply chain.

“To deliver genuine progress on the ground, Budget 2017 will need to provide much more detail as to how the Government intends to deliver on the environmental and low carbon ambitions to be set out in its upcoming emissions reduction plan and 25-year plan for the environment.”

Julie Hirigoyen, chief executive, UK-Green Building Council (UK-GBC)

“We welcome the Government’s announcement of a boost for affordable housing, and the efforts being made to reduce the costs for those in rented accommodation. However, energy bills are a growing financial concern for the “just about managing”. Government must do more to ensure that our homes are cost effective to run in the long term.

“If the Government is serious about delivering ‘a housing market that works for everyone’, new homes must be built to higher energy efficiency standards, to prevent us having to retrofit them in the future. The Government must also do more to support energy efficiency measures in existing homes, making them cheaper to heat and healthier to live in.

“The Chancellor’s focus on R&D and productivity is also welcome; low carbon technologies are the ultimate ‘disruptive technology’ and there are clear economic opportunities for the UK to position itself as a global market leader. High-quality, sustainable buildings can also improve the productivity of the organisations that work in them.”

Gary McGovern, energy and planning partner, Pinsent Masons

“After recent subsidy upheaval, the renewable energy industry requires Government to take a more transparent and consistent approach. Long term transparency and stability and a clear direction of travel is critical to promote investor confidence, allow informed investment decisions and safeguard investment for years to come.

"The LCF framework strikes at the heart of this issue. Given investment cycles and long lead-times for energy projects, the 2020/21 close of the current LCF is really not far away. Many developers will already be looking to business plans for development post-2020 and deciding which markets are most attractive.

"We need a clear picture of the budget level beyond 2020/21 to safeguard the future of UK renewables. A clear understanding of the LCF, the timetable of future CfD auctions and which technologies will benefit would demonstrate a continued appetite for clean tech. This will be important if UK renewables is to avoid capital going overseas to emerging renewable markets offering greater stability.”

Kristian Dales, sales and marketing Director, FCC Environment

“We welcome the Government’s commitment to making the UK an attractive place to do business, and believe tackling the country’s infrastructure challenges should be a national priority.

“We are encouraged to see the Government recognise the importance of waste in delivering a national infrastructure plan that works for Britain, which could enable our industry to deliver 50,000 new jobs and boost GDP by an additional £3bn.

“We would urge the Government to continue to foster its relationship with industry so that our sector can fully capitalise on its ability to improve the UK’s energy and resource security.”

Take a look through edie's live Autumn Statement blog below, which rounded up all of the key points and green business reaction, as it happened.

George Ogleby


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