‘Another barren Budget for net-zero’: Green economy leaders react to Jeremy Hunt’s announcements

Hunt delivered his Budget speech on Wednesday (6 March) against a backdrop of reports that he and other Cabinet members were rowing over how best to raise funds to support a swathe of tax cuts and freezes.

There was less of a storming focus on green industries as there had been at either of last year’s speeches. In fact, Hunt argued that delivering a faster clean energy transition would result in higher taxes and failed to announce any measures to make electric vehicles (EVs) more affordable, despite calls to action from the auto industry and energy companies.

There were some welcome inclusions, like funding to scale offshore wind, hydrogen and carbon capture supply chains in Britain. But most green economy decision-makers and thought-leaders believe this Budget presented many missed opportunities for seizing the growth potential of the net-zero transition.

Here, edie rounds up all the reactions.

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

“Yet another Budget that largely ignores the dangers of climate breakdown, and yet another missed opportunity to properly invest in building a strong, clean and prosperous future.

“New research published only last week revealed that the UK’s net zero economy grew by 9% in 2023, while the rest of the economy continues to stagnate.

“The UK’s failure to match the US and EU, who are leading the charge with billions of pounds of green investment, will cost this country jobs and future prosperity.

“We need a Chancellor for the future, not one stuck in the past. Money spent on renewables, home insulation and better public transport would not only boost the economy; it would also protect health, slash energy bills and help the UK play its part in the fight against the growing climate crisis.”

UK100’s chief executive Christopher Hammond:

“The Budget barely mentions net-zero, despite all the evidence demonstrating the path to productivity and growth runs through net-zero, with the sector far outperforming the wider economy last year.

“Meanwhile, as the Chancellor rightly said, productivity-boosting dynamism doesn’t come from Ministers in Whitehall, it comes from our communities. But right now local councils and communities are hamstrung by an uneven approach to devolution and piecemeal funding schemes that are needlessly bureaucratic.”

Green Alliance’s executive director Shaun Spiers:

“In contrast to the EU and US who are investing at scale in the energy transition, the Chancellor has today put short-term political advantage ahead of the investment the UK economy urgently requires. This Budget is a missed opportunity to boost productivity, grow the economy and tackle the energy crisis.

“Tragically, the climate and nature crises have once again been sidelined. The next government must revise the fiscal rules to allow for the long-term investment the country needs. That will be essential if the UK is to have any chance at reclaiming its leadership role on the environment and seizing the economic opportunities of the net-zero transition.”

E3G’s campaigns director Ed Matthew:

“This Government has no credible plan for growth. Uncertainty on how the UK will decarbonise industry, homes, power and transport has led to chronic under-investment. This is compounded by a lack of green tax breaks, low levels of public investment and not having a long-term Net Zero Investment Plan.

“The UK is being outcompeted on cleantech investment by the US, Europe and China as a result. The UK economy is flat-lining and this Budget will fail to bring it back to life.”

E3G’s senior policy advisor for the UK electricity transition, Susanna Elks:

“Tucked away in the small print of the Spring Budget, the government has announced reforms to electricity networks and a beefed-up budget for the next wave of offshore wind projects, through the Contracts for Difference (CfD) renewables auction. This suggests that the Conservatives can’t ignore that low-cost renewables are the growth engine of the future and can help cut bills. Nonetheless, there are concerns this pot may still be insufficient to make up for last year’s failed renewables auction round.

“While today’s announcement is welcome, the UK still lacks an overarching plan to create a clean low-cost electricity system– with a failure to provide support for hydrogen-to-power, long-term storage and demand side flexibility. These are key technologies which could help end our addiction to expensive polluting gas while reducing bills for consumers.”

UKSIF chief executive James Alexander:

“The Spring Budget included several proposals designed to cajole UK savers and the financial services industry into investing more in the UK. Forcing pension funds to disclose rates of UK investment or increasing the ISA allowance for investment in British firms, fail to resolve the policy barriers driving private capital abroad, particularly in sustainable industries, which are our biggest source of future growth.

“Our members are clear that the answer to unlocking billions more in private investment, lies in demonstrating policy certainty and ensuring the UK has high-quality investable projects with long-term growth potential.”

The UK Green Building Council’s deputy CEO Simon McWhirter:

“Unfortunately we’re yet again seeing vote-chasing sticking-plaster politics as opposed to the longer-term political leadership we so desperately need. The Chancellor has failed to address the urgent need for upgrading our homes and buildings in this Budget, which wouldn’t just help address the climate crisis, but also directly tackle rising energy bills, poor-quality homes and provide a jobs boost into the economy.”

The Association for Decentralised Energy’s industrial energy policy officer, Oz Russell:

“We commend the focus on connections reform in this budget given its centrality to increasing growth and decarbonising industry.

“However, with an election around the corner and a report published this week using the International Energy Agency’s (IEA) figures that shows the UK is spending the least among the top five major European economies on low-carbon energy policy, this budget represents a missed opportunity to provide much-needed support to industry on issues like electrification and decarbonisation infrastructure outside of the industrial clusters.”

Greenbank’s stewardship and engagement lead Sophie Lawrence:

“The Chancellor’s Budget for growth prioritised tax cuts over the long-term investment needed to put the UK on a credible pathway to sustainable economic expansion. This is short-sighted, given the systemic risks facing the economy – whether this is from the decline in nature and biodiversity, climate change, or the rising levels of obesity. Clear, long-term plans from government on how to address these long-term sustainability issues are vital if we are to encourage private sector investment.”

The Institutional Investors Group on Climate Change’s policy programme director Emily Murrell:

“The UK Chancellor called this “a budget for long-term growth”. However, the measures announced today do little to encourage much-needed investment in the green industries that will contribute most to the sustainable growth, competitiveness and productivity of the UK economy.

“If the UK is to remain an attractive hub for inward investment, the Government must do more to tackle policy barriers and promote an enabling policy environment that supports long-term investment and keeps pace in an increasingly competitive global landscape.

“The pledge of £120 million for the Green Industries Growth Accelerator (GIGA) is a relatively small amount when compared to the significant incentives being offered to investors by the US Inflation Reduction Act and the EU Green Deal. There remains a lack of spending on developing UK green industry and the related jobs it creates by the UK Government

“The majority of investment needed to reach net zero must come from the private sector. This budget lacked any major policy announcements that would unlock the major investment required to maintain the UK’s status as a leader in green finance, and fulfil its decarbonisation targets. It is disappointing not to see more focus on climate, as this is the last major fiscal announcement before the General Election.”

Risilience’s director of environmental risk analytics Oliver Carpenter:

“The omission of serious climate policies creates unnecessary turbulence for businesses who seek clarity to enact their own net zero ambitions. The spring budget fails to recognise the potential of investment in the green economy to stimulate growth, grow the nation’s resilience to ongoing energy price turbulence, and mitigate systemic climate risks which increasingly undermine our economy.”

Diligent’s general manager for the EMEA region Keith Fenner:

“Greater clarity from the UK Government on net-zero plans is needed for businesses to embrace innovation, carefully manage transition risks, and become confident in meeting the country’s sustainability goals.

“The UK stands at a pivotal moment, and the mission to reach net zero by 2050 means it is critical that organisations of all sizes focus on ESG. It’s important to remember that the Government has set goals not guidance, so the pressure is on to meet them.

“Going further, the Institute of Directors (IoD) is concerned with the UK’s ‘rate of sustainable economic growth’ and is encouraging more incentives for SMEs to switch to net-zero. This transition to a low-carbon economy presents both exhilarating opportunities and daunting challenges for business leaders and boards.”

The Energy and Climate Intelligence Unit’s transport analyst Colin Walker:

“Electric motoring is cheaper motoring and the fuel duty freeze hasn’t changed that. More households are getting access to electric vehicles through the second hand market, fuelled in no small part by companies buying new EVs and selling them on three to four years later to the 80% of us who rely on the used market to buy our cars.

“If the Chancellor really wants to help the UK’s drivers save money, helping drivers make the move to EVs will make a much bigger difference. The policies to achieve this, and called for by UK motoring groups, include bringing VAT on public charging in line with VAT on private charging at home by reducing it from 20% to 5%, or temporarily halving VAT on sales of new EVs”.

EO Charging’s chief executive Charlie Jardine:

“Incentivising citizens and commercial fleets to switch to EVs is a critical step in the Government’s net-zero strategy. It is therefore disappointing not to see a VAT cut on EVs as part of the Spring Budget announcement, as we believe this would have helped increase the uptake of EVs.

“Stagnating sales of private EVs in the UK underscores the need for the Government to prioritise policies and investments to encourage mass market adoption of EVs, and the UK risks falling behind its global peers if it does not take measures to help drive uptake.

“Many Governments worldwide have introduced policies and incentives to encourage EV adoption. As well as tax incentives, these include subsidies for purchasing electric buses, grants for building charging infrastructure and mandates for transitioning to zero-emission fleets.

“However, there is a widespread perception that EV incentives primarily benefit affluent private EV owners. To ensure equal access to electric vehicles, the Government should also consider measures that benefit a wider cross-section of the public, for example grants for charging infrastructure and mandates for zero-emission bus fleets. This would help support those on lower incomes who may not be able to own an EV, but who should not be missing out on the environmental and health benefits of electrification.”

IPPR senior research fellow Maya Singer-Hobbs:

“Maintaining the fuel duty freeze for another year at a cost of £5bn does nothing to help those who do not drive, who are likely to be on the lowest income, and disproportionately benefits the wealthiest drivers.  

“The fuel duty freeze is just tinkering around the edges of the costs our transport system places on households. It also drives up carbon dioxide emissions and makes meeting our climate commitments even harder. 

“This budget has been a missed opportunity to invest in affordable alternatives to driving, despite the huge appetite across the country for investment in public transport and desire from many to travel more actively.” 

The Carbon Capture and Storage Association’s chief executive Ruth Herbert:

“The UK’s carbon capture, usage and storage industry is still waiting for the funding announced in last year’s Spring Budget to be committed to projects, with final investment decisions for projects in the north-west and north-east of England needed in the next few months.”

“Today’s Budget was a missed opportunity for the Government to put in place a longer-term revenue support envelope for the next wave of projects – to provide the level of certainty they need to move forward.  Without this, the UK risks losing the opportunity to attract around £30bn of private investment into UK CCUS by 2030, which would create and protect tens of thousands of jobs and transform industrial regions across the UK.”

Ashden UK’s policy lead Will Walker:

“Apart from some welcome extensions to existing Government schemes, such as a relatively small funding boost to the Green Industries Growth Accelerator, this was another barren budget for net-zero.

“The country is crying out for bold government leadership and a credible plan to address the triple-whammy of energy security, fuel poverty and the climate crisis. This has to be done through sustainable clean growth. Any plan needs to be backed with the right powers, resources and incentives to empower communities, leverage investment, upskill and expand the workforce, and revive the economy.”

“The Chancellor said he wanted to ‘build up our resilience to future shocks’. However, in reality, he failed to read the room and delivered a budget that misses the fact that citizens, by and large, care more about long-term investment in public services and getting help with their energy bills than short-term tax cuts.”

The Climate Group’s executive director for Governments and policy Champa Patel:

 “Another Budget, another failure to address the huge range of climate issues we face. While the world is literally heating up, the UK’s response is simply to edge forward on investment for green growth and nuclear and keep investing in oil and gas.

“We are missing a much-needed push on renewables, EVs and energy efficiency, where other countries are leaving us far behind. The UK is tinkering around the edges when its companies need long-term clarity and direction to invest with confidence in climate solutions and economic growth. We are seriously wondering when the UK realise that – and budget for it.”

Heatio co-founder Thomas Farquhar:

“Net-zero should be treated as a National Security issue that cuts through politics. We need long-term thinking that will encourage consumers to make the switch from inefficient fossil fuelled gas boilers and onto low-carbon electricity technologies like heat pumps, that will ultimately bring down their energy bills while prices are lower than they have been.

“Continuing the windfall tax on the huge profits energy companies have made is good news, however, we must make sure this short-term additional revenue is put to the best use in terms of improving our energy security so we are not impacted by future price spikes.”