‘A mixed bag on net-zero’: How did the green economy react to the Autumn Statement?

A week out from COP28, Chancellor Jeremy Hunt delivered an Autumn Statement that offered a few welcome support packages for the low-cabon transition, but green groups believe much more could’ve been done to turbocharge the nation’s approach to net-zero.

‘A mixed bag on net-zero’: How did the green economy react to the Autumn Statement?

Image: HM Treasury

In an Autumn Statement centered around what the Chancellor described as the UK’s “largest business tax cut” in modern history, there were only fleeting mentions of the green economy.

Just one week out from COP28 in Dubai, many in the green economy hoped that the Chancellor’s Autumn Statement would unveil funding and spending decisions that spurred the nation toward its net-zero target and responded to flagship green policy packages from other nation; such as the US Inflation Reduction Act.

The Autumn Statement left those in the green economy deflated rather than inflated, with only a handful of the 110 measures introduced today covering climate and the green sector. Indeed, climate is only mentioned in the official documents 13 times, most of which are footnotes and references.

While plans to speed up the transmission network and almost £1bn in funding for clean energy manufacturing were a welcome jolt to speed up the UK’s net-zero transition, many are either still seeking clarity on the funding or believe that more could, and should, be done to ringfence finance for green sectors.

Here, edie rounds up all the key reactions from the green economy.

John Pettigrew, chief executive, National Grid:

“A spatial energy plan and accelerated planning consent will bring clarity, authority and urgency to what needs to be built and where, while new community benefit proposals will ensure local people remain at the heart of the energy transition. The connections action plan will deliver fundamental reforms needed to enable us to plug clean energy projects in faster, and build on the progress already being made.

“The intent is clear and welcome; now these plans must be implemented at pace to capture the economic opportunity of the energy transition and keep Britain on target to achieve its climate goals.”

Professor Piers Foster, chair, Climate Change Committee (CCC): 

“The Autumn Statement sets a welcome direction towards tackling some of the barriers in the Net Zero transition. Accelerating the building of the transmission network with benefits for the local communities, speeding up grid connections and the proposed planning changes for heat pumps and electric vehicle infrastructure are all positive steps taken today. These measures will help increase public support for the Net Zero transition and help build business confidence.”

Simon Virley, Vice Chair and Head of Energy and Natural Resources at KPMG UK:

“Plans to accelerate upgrades to the transmission network, when coupled with last week’s announcement on increased strike prices for the next renewables auction, send a positive signal to the market that the Government is listening to what investors need. Planning and consenting delays are one of the main barriers to the delivery of more renewables on to the grid, and so the adoption of Nick Winser’s recommendations is welcome news.

“While these are important steps to build confidence for investors in the energy transition and address some of their concerns, we need to look at how this stacks up globally. If this is the long-awaited response to the Inflation Reduction Act, and other support packages such as the EU’s Green Deal Industrial Plan, then fiscally it falls short of the $379bn on offer in the US. Time will tell if this is enough to convince investors that the UK is still a good place to invest. We are in a global race for green investment so we cannot be complacent and rely on past progress to entice global investors to the UK.”

Ed Mathew, campaigns director at E3G:

“The UK has fallen behind the US, EU and China in clean tech investment and the announcements today are not enough to get us back in the race. Whilst reforms to speed up grid connections and boost funding for green industry are helpful, there is no credible net-zero investment plan and no green industrial strategy. This response is incoherent, too little and too late.”

Beverley Cornaby, Director of the UK Corporate Leaders Group:

“Major fiscal events like the Autumn Statement are a chance for the government to demonstrate that its economic strategy has positive climate action at its core. Powering up the green transition can deliver significant benefits to drive the UK economy. However, today’s Statement was another missed opportunity from this government to set the tone and send the signals that the private sector is crying out for.

“The Chancellor took some positive steps such as full expensing of capital allowances that will spur on much-needed private sector investment. While tax cuts will be welcomed by business, as will specific measures to aid expansion of the electricity grid and invest in manufacturing including electric cars, they will not lead to the levels of green economic growth that we now urgently need. What is missing is the signal of intent that will foster a shift in private sector investment and a commitment of government leadership to tackle some of the tougher aspects of decarbonisation. Investment and a focus on the enablers of green economic growth would go a long way to delivering productivity gains that would benefit the wider economy and crucially help the UK to cut its carbon emissions. The UK government still needs to step up, and quickly, to take leadership in these areas. “

Rachel Solomon Williams, executive director at the Aldersgate Group:

“This Autumn Statement takes some positive steps forward, but higher ambition and policy stability are critical if the Government is to get the economy back on track in the coming year. Ultimately, making decisions for the long term demands a commitment to implementation now, supporting the development of low-carbon industries that will drive future growth. Businesses recognise this and are acting accordingly – Government must match their ambition by building on today’s announcements and creating a supportive environment.

“We welcome the announcement that capital full expensing will be made permanent, as it can drive business investment in decarbonisation – but it is not enough on its own. This urgent need for action is demonstrated in clean energy investment, where the UK has fallen from fourth to seventh in attractiveness to investors, in part due to global competition from the United States and the EU, but also a lack of consistent policy support from the Government. A comprehensive response to the US Inflation Reduction Act remains critical, as part of a clear industrial strategy which provides the UK economy with a clear direction that businesses can rely on. Funding for engineering apprenticeships is also a welcome development, but should be expanded further to include support for on-the-job learning, in order to address the green skills gap holding back the net zero transition.”

Cara Jenkinson, cities manager at Ashden:

“With just a few days to go until COP28, the Chancellor has once again missed an opportunity to show leadership on climate action. After rolling back on net-zero targets last month, there has been a stony silence on energy efficiency – leaving people exposed to cold homes and high bills. The energy efficiency industry once again faces an uncertain future, jeopardising the chance to create decent jobs across the country.

“Although Jeremy Hunt put forward support for green industry in his speech, the elephant in the room once again is energy efficiency – despite it being one of the quickest, easiest and least costly things we could do to improve people’s lives. Why would a Chancellor not do this?

“A long-term investment in energy efficiency now would reduce our exposure to volatile gas prices, cut the cost of expensive upgrades to our energy grid, and improve the mental and physical health of millions of people facing fuel poverty.”

Peter Chalkley, director at the Energy and Climate Intelligence Unit (ECIU):

“Following the PM’s speech slowing progress on net zero, we’ve now got the Chancellor entering the global race to incentivise clean industries to set up here, rather than elsewhere. Some of these measures are a positive step for jobs and there will be warm words, but with business leaders, most politicians and the public alike seeing clean as the next big thing, and with the US, EU and China already powering ahead, does this risk looking too little, too late? The Government will likely need to do more in the coming months to calm investor nerves. Things over the past few months have looked, to say the least, a little confused.

“The Chancellor had nothing to say on energy efficiency. Many had been calling for a stamp duty rebate for those who invest in upgrading their homes. Coupled with the PM’s recent row back on requirements for landlords to provide warm, insulated homes, this leaves many families colder and poorer. This will seem particularly painful as Ofgem is set to announce another increase in energy bills tomorrow.”

Ruth Herbert, chief executive of the Carbon Capture and Storage Association:

“The Chancellor’s investment of almost £1bn in the Green Industries Growth Accelerator will help develop domestic clean energy supply chains, including for CCUS, and is a welcome step to deliver on the UK’s clean energy sector’s current needs and future potential.

“The supply chain for CCUS products is estimated to be worth £181bn per annum by 2050 and it is critical the UK keeps up with its international peers in the global race to develop this new green industry. Success means the protection of 77,000 existing industrial jobs, and 70,000 additional jobs in new sectors.”

James Alexander, chief executive at UKSIF:

“We welcome the Chancellor’s plans to speed up grid connectivity and reform planning for renewable energy projects, which could reduce some of the burdens holding back private investment into the low-carbon economy, although it remains to be seen how effective these will be in practice.

“The size and scale of commitments made today still fall short of a sufficiently comprehensive response to the US Inflation Reduction Act, the EU’s Green Deal Industrial Plan, and similar initiatives in other jurisdictions. If the UK is to attract the capital needed to lead the global transition to a more sustainable future, creating jobs and economic prosperity, we must build investor confidence, address greenwashing risks, and tackle more of the UK’s underlying investment barriers. The Chancellor didn’t go far enough.”

Mike Childs, head of policy, Friends of the Earth:

“With crucial UN climate talks less than a week away, there was little in this statement to boost the UK’s rapidly evaporating credibility on climate change. There was cold comfort for the millions of households bracing themselves for yet another winter in damp, freezing homes that they can’t afford to heat. Yet again the Chancellor was silent on the need for a national drive to insulate homes – the most significant measure to reduce sky-high energy bills.

“Nearly two years into the energy bills crisis, we desperately need the strength of leadership to tackle the root of the problem: our woefully heat-leaking housing stock and reliance on fossil fuels.

“Instead, we’ve seen more handouts for the fossil fuel industry, failed auctions to build offshore wind, and plummeting insulation installation rates. It’s hard to imagine how this government could be doing a worse job.”

Frank Gordon, director of policy, Association for Renewable Energy and Clean Technology:

The Chancellor’s Autumn Statement revealed some welcome and long needed measures to speed up grid connectivity, while conformation of permeant tax allowances for businesses investing in plant and machinery, should also help incentivise companies to deploy renewable and clean technologies to help them decarbonise.

“In light of economic forecasts estimating rising inflation and lower growth, the REA reiterates the singular economic growth opportunities of renewable energy and clean technology.

“We are clear, tackling climate change and boosting our economy is not an ‘either-or’ decision. We cannot forget that rising energy prices were the major source of inflation in the past year and the only way to remove this risk to the economy is move rapidly to renewables and end reliance on imported fossil fuels.”

Roger Mortlock, chief executive, Campaign to Protect Rural England:

“Planning decisions should be in the wider public interest rather than just being about compensating people for loss of property values. Individual householder payments don’t make sense for rural communities. It would be far better for National Grid and others to invest in community energy schemes that make communities as a whole better able to adapt to climate change and move towards net-zero.

“National Grid already works to bury existing or new pylons in protected landscapes, but that is because improving these landscapes is a benefit for the whole nation rather than just those who live near to where the undergrounding takes place. When the will is there, we can protect our iconic landscapes and meet our nation’s energy needs.”

Simon McWhirtier, deputy chief executive, UK Green Building Council:

“The Government heard the furious backlash to its green policy rollback last month; and this was a chance to realise scale of their error by shoring up protections for struggling households and small businesses and get energy bills and carbon emissions under control.

“It’s not that the Government hasn’t been presented with the ideas to address the problem. Industry has been offering oven-ready policy proposals such as modernising Stamp Duty with a ‘rebate to renovate’ incentive for households that would accelerate home insulation, cut our reliance on polluting fossil fuels, and motivate people to switch to low carbon heating and install solar panels – all while also ‘backing British businesses’ by creating a large-scale, long-term retrofit market to support industry and deliver skilled jobs throughout the country. We hope it will be announced in the Spring Budget.”

Sian Sutherland, co-founder of A Plastic Planet and PlasticFree:

“Britons are being forced to deal with the grim inflationary consequences of this Government’s love affair with big oil.

“We could be a global leader in the export of renewables. Instead, this Government approves new oil fields and are slaves to eye-wateringly expensive fossil fuel imports. We could be eradicating toxic single use plastics from our nation and yet the Government shies away from action. Yet again big oil’s plan B, plastic, is being shielded by Sunak’s Government.

Dr Maya Singer-Hubbs, senior research fellow at IPPR:

“With the exception of some changes to the planning system to speed up grid connections, this budget had several glaring omissions – nothing remotely close to echoing the investment seen in the US and EU on green investment, nothing on providing active travel options, and nothing on energy efficiency.” 

Gareth Griffiths, chief executive, Ecology Building Society:

“Today we heard a budget focused on party politics – not on what is most needed for people and planet. We need urgent and effective action from the Chancellor to improve the energy efficiency of British homes through a comprehensive national plan for retrofitting, cutting families’ energy bills and reducing emissions. Sadly, far too many people currently find themselves trapped, with no affordable means to improve their homes.”

Maggie Chapman MSP, spokesperson for the Scottish Greens:

“With COP28 just around the corner, this is the time for a radical green industrial strategy. But what they have offered is fiddling at the edges while the world burns around us. They are planning to give away even more of our North Sea to polluters while utterly failing to live up to the urgency of the climate emergency.“

Stuart Lennon, chief executive, EcoAct:

“The UK’s approach to achieving net-zero remains unconvincing. While the £4.5bn investment into strategic manufacturing sectors to spur net-zero and the maintenance of the tax break for capital investment are most welcome, there remains an overreliance on unproven technology solutions.

“Meanwhile, properly addressing domestic high-carbon activities directly has once again been missed, undermining the country’s position as a leader on climate change.”

Christopher Hammond, chief executive, UK100:

“The Autumn Statement rightly recognises our outdated energy grid has become a major barrier to — rather than catalyst for — Net Zero. We welcome interventions to speed up grid connections, support the rollout of EV infrastructure and remove constraints on heat pumps adoption. But these reforms are ultimately workarounds for a planning system that fails to put local climate action at its heart.”

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