‘Measures miss the mark’: Green groups react to Chancellor’s Spring Budget
Chancellor Jeremy Hunt’s Spring Budget has some hefty ambitions and funding for carbon capture, nuclear and energy relief support, but green groups have warned that the measures announced “haven’t come close” to delivering wider climate and nature goals.
Will this Budget help the UK reach net-zero?
his first Budget as Chancellor, Hunt unveiled new measures to extend energy-efficiency tax breaks for businesses, a multi-billion-pound support package for carbon capture technologies and new innovation funding for nuclear, which will be officially classed as “environmentally sustainable” moving forward.
The new policies will add to the jigsaw of legislation designed to strengthen the UK economy – an economy that is committed to reaching net-zero by 2050. However, the Net-Zero Strategy has been deemed unlawful and is due to be updated this month.
Green groups have expressed concern that the measures announced today will not put the UK on track to protect the planet and nature.
Caroline Lucas, Green Party MP for Brighton Pavilion
“Despite waxing lyrical about his four Es, Chancellor Hunt utterly failed to mention a fifth E – environment. Just when we needed a solar rooftop revolution, an unblocking and upscaling of renewables, a major street-by-street mass insulation programme, and a commitment to invest in our totally neglected, sewage-filled rivers and seas, we get too slow, too expensive and too dangerous nuclear white elephants.
“A Budget that fails to protect our environment gravely risks damaging our economy too.”
Aldersgate Group’s head of public affairs and communications Signe Norberg
“With the welcome news that the economy is forecast to grow, it is vital that the UK Government uses this opportunity to secure sustainable, long-term economic growth by ensuring the country can take advantage of the economic opportunity presented by the transition to net zero.
This must include investment in renewable energy to bring down consumer bills, support wider industrial decarbonisation, and generate reliable, low carbon energy. Funding for carbon capture utilisation and storage (CCUS) and the extension of the Climate Change Agreement scheme are welcome in this regard, but these commitments need to be further underpinned by a wider policy response, which drives investment towards low carbon and nature solutions and decarbonises the UK power sector by 2035.”
Climate Group’s chief executive Helen Clarkson
“The US, EU and China are overpowering the UK in the race to decarbonise, and unfortunately, this budget falls short of offering a plan to compete for green investment. While Chancellor Jeremy Hunt nodded to the UK’s past achievements on expanding offshore wind and rooftop solar, this Spring Budget overlooks cheap and clean renewable energy, and instead rebrands nuclear as ‘environmentally sustainable’ and throws cash at carbon capture technology.
“This was a missed opportunity to renew the UK’s commitment to climate leadership, seriously invest in energy efficiency, speed up the electric vehicle switch, stop subsidies for fossil fuels and increase onshore wind.”
IPPR’s associate director for energy and climate Luke Murphy
“The extension of the energy price freeze will bring welcome relief to families across the country. But today’s budget failed to provide enough substance to deliver the medium to long-term solution to high energy bills – an accelerated rollout of renewables, energy efficiency, and clean heat.
“The announcement on industrial carbon capture and storage is welcome, though we await the detail. But the government has been warned repeatedly of the risks of failing to meet its climate targets or to reap the benefits of delivering net zero, including by its own advisers. There is a global race to the top in reaching net zero, and the UK now risks falling seriously behind our competitors.
“The government needs to learn the lessons from the US and Europe, ramp up public investment and bring forward a green industrial strategy, safeguarding our economy and environment for the future.”
Friends of the Earth’s head of policy, Mike Childs
“Jeremy Hunt’s budget falls far short of the urgent need to address both the cost of living and climate crises. Backing expensive technologies like carbon capture, and storage and a new nuclear programme, while still blocking cheap onshore wind in England and failing to properly insulate the UK’s energy leaking homes, will leave the UK hooked on high energy costs and falling behind in the global race to benefit from the transition to greener economies.
“This budget will do nothing to close the glaring gaps in the UK’s failing climate plans which were found to be unlawful by the High Court last year. When it comes to the environment, this government isn’t working.”
WWF’s executive director of advocacy and campaigns Kate Norgrove
“This budget hasn’t come close to delivering on our legally binding climate and nature goals. We need to see policies that drive down emissions, restore nature and provide meaningful support for the public in the cost-of-living crisis.
“At every Budget we need to see the Government publish a net-zero tracker, showing whether public spending is in line with their legal climate and nature commitments. The UK is one of the most nature depleted countries in the world. Until the government take the meaningful steps to rewire our economy to deliver on climate and nature action, we will continue to see budgets that fail to meet the challenge to save our Wild Isles.”
Does the energy relief support go far enough?
The Chancellor unveiled his budget just hours after the Treasury confirmed that the Energy Price Guarantee (EPG) would be kept at £2,500 for an additional three months from April to June.
While this immediate relief is welcome, many green groups will express concern that this is just another short-term sticking plaster that fails to deal with the long-term need to reduce the UK’s reliance on fossil fuels.
UK100’s interim chief executive Jason Torrance
“The Chancellor’s focus on energy security, energy bill support and devolution is a welcome statement of intent — but we’re worried the measures themselves miss the mark.
“Extending the Energy Price Guarantee for a further three months offers consumers a vital but brief reprieve from sky-high energy bills. However, Jeremy Hunt has let slip another golden opportunity to embrace a targeted, long-term solution.
“At the same time, the Chancellor’s energy security plans ignore the cheapest and quickest way to boost UK energy production while accelerating Net Zero action; investment in renewables, including making good on the promise to lift the de facto ban on onshore wind.”
Octopus Energy’s founder Greg Jackson
“The extension of the energy bill support is a huge relief for millions of customers. Wholesale costs are falling, but they are still significantly higher than normal levels. This help is vital not only for households, but also for helping the economy and tackling inflation.”
Was this a missed opportunity for transport?
Hunt also confirmed that the Government would maintain the current freeze on fuel duty. In previous Spring Statements and Budgets, green economy figures have criticised the Treasury for not increasing fuel duty.
It was rumoured that a planned 11p fuel duty rise would be introduced in this Budget, but Hunt has maintained the 5p cut issued last year for another 12 months, claiming that drivers will be able to save around £100 as a result.
However, the Budget announcement has no mention of other parts of the transport sector, including aviation, or how electric vehicle (EV) uptake can be supported.
American Express Global Business Travel’s president Drew Crawley
“The Government has missed an opportunity to lead the decarbonisation of air travel. The new £20bn clean energy package fails to provide vital support to drive production and uptake of sustainable aviation fuel. A turbocharged UK SAF industry would benefit people and the planet: well-established, it could create more than 20,000 jobs and generate £3bn GVA by 2035 while reducing aviation carbon emissions by 80% or more.
“We need sustained, collective action across public and private sector. That’s why Amex GBT will continue to develop its landmark SAF programme, making it easier for companies and organisations to invest and report on SAF usage for business travel.”
Lloyds Banking Group’s transport managing director Nick Williams
“It’s disappointing that today’s Statement from the Chancellor announced no new support to strengthen the UK’s electric vehicle charging infrastructure. It remains impressive that electric vehicles are entering the roads at record rates, but to meet this growing demand we need a charging network that can deliver, both in terms of availability and reliability. To achieve this, rapid expansion will be key.
“With the upcoming Zero Emissions Vehicle mandate also incentivising manufactures to bring more electric vehicles to the UK market, the call for an expanded charging network will be even greater, so the lack of support in today’s Statement is a big setback. We’re hopeful that the government will reveal more plans ahead of its implementation next year, or we risk impacting the longer-term uptake of electric vehicles as confidence in our country’s infrastructure waivers.”
What could the investment Zones mean for Net-Zero?
Hunt also unveiled the locations for 12 new “investment zones” that will each receive £80m in government funding over the next five years to scale up research and development across the pillars of digital technology, life sciences, advanced manufacturing and the green economy. Hunt claimed that the Government could create “12 new Canary Wharfs” through this funding.
Very little has been revealed as to how these areas will prioritise investments, but early comments suggest that this is another example of a Government announcement with very little thought or planning to back up the idea.
Law firm Taylor Wessing’s head of planning and environment Alistair Watson
“The size of the budget pots per Investment Zone is more akin to seed-funding or pump-priming, so the need for the private sector to step in and invest and collaborate is huge. As a real estate sector, we are very keen to collaborate, and this is the almost perfect next step for us to engage. What would make it the perfect step? A modern planning system, and that still needs Government attention and action.
“Government policy is also backing sectors of the now and the near future – technology, creative industries, life sciences, advanced manufacturing, and the green sector. All of those 5 sectors have one thing in common; they need real estate. By that, we mean retrofitted and re-purposed buildings, and if not possible then new developments that meet new energy efficiency standards, more flexible spaces that are multi-use, and speedy and efficient connections to the grid for EV infrastructure and services to buildings, to continue the growth and development of their innovations. Yes, we need more partnerships and we need more development; and we need to go harder and go faster. The ‘Mission Zero: Independent Review of Net Zero’ of January 2023 led by Rt Hon Chris Skidmore is right.”
Together’s chief executive of commercial finance Marc Goldberg
“Recommitment to the levelling up agenda, with £58m ringfenced for projects in the North West, and the further promise of £80m over the next five years for 12 new investment zones – which will be dominated by regeneration projects in Greater Manchester, Liverpool, the Northeast, South Yorkshire, the Tees Valley – is a welcomed move and puts the North of England squarely on the map from an investment perspective.
“Whether this funding is a success or not will be judged by the take-up of jobs within local communities, ability to properly support up and coming businesses in the zones and impact to our regional economy which may have narrowly missed the trap of a recession this year; but is still hampered by high energy costs and skills shortages.”
Were other low-carbon solutions ignored?
Hunt confirmed that £20bn would be ringfenced to support the early development of CCS technologies, starting with projects on the East Coast, Merseyside and North Wales. Hunt claimed that the funding will support around 50,000 jobs and help capture 20-30 million tonnes of CO2 per year by 2030.
However, very little else was mentioned in the way of low carbon innovation, with renewables, hydrogen and electric vehicles failing to be included in the Budget. Many early responses to the announcement have warned that the Government needs to prioritise a range of low-carbon solutions.
Ashden’s cities manager Cara Jenkinson
“This budget was a terrible wasted opportunity. Mr Hunt referred to four Es in his budget –‘ Enterprise, Employment, Education and Everywhere’ but the two that could have helped all four were missing – ‘Energy Efficiency’.
“This budget showed a UK government committed to investing £20bn in nuclear and carbon capture. £20bn could retrofit millions of homes and provide the government and society with huge quick wins – tackling the energy, climate and cost of living crises at the same time.
“The chancellor’s thinking needs a rapid upgrade – just like 19 million homes in the UK that need retrofitting. By laying out measures to boost retrofit demand and creating a generation of skilled retrofit workers, he could have not only generated savings for struggling households, but also given businesses the confidence needed to generate over 200,000 new energy efficiency jobs. A missed opportunity, that UK households, workers and businesses will keenly feel in years to come.”
KPMG’s vice chair and head of energy Simon Virley
“The announcement of up to £20bn of funding over 20 years is welcome, but this should be viewed as a ‘down-payment’ on creating the hydrogen and carbon capture industries of the future. The UK has some unique advantages, like the co-location of potential CO2 stores close to the main industrial clusters, but an average spend of £1bn a year won’t be enough to hit the Government’s own target for CO2 capture by 2030.
“The Government also needs to provide greater clarity for those projects involved in the ‘Track 1 Expansion’ and ‘Track 2’ clusters by setting out the process and funding for the next rounds of deployment. We are in a race for global investment, given the Inflation Reduction Act in the US and the countermeasures being implemented under the EU ‘Green Deal’, so the UK can’t afford to be half-hearted if we want to build world-leading hydrogen and CCUS industries.”
UK Sustainable Investment and Finance Association’s (UKSIF) chief executive James Alexander,
“While a number of today’s Budget measures are welcome, including support for carbon capture and storage technologies and some clarity provided on the UK’s ‘green taxonomy’, this Budget should have begun serious consideration of a positive UK response to the global clean energy ‘arms race’.
“The upcoming ‘Green Finance Strategy’ should give this further attention, particularly in light of actions outlined by the United States and more recently the EU. As a priority, many investors want to see from government credible decarbonisation roadmaps for key economic sectors, including for those areas where policy clarity is particularly lacking, as well as incentives in place to unlock private capital into the wider economy and the UK’s transition. We look forward to continue working with policymakers and other stakeholders ahead of the Strategy, and hope that collectively we can seek ways to secure the UK’s ongoing leadership on sustainable finance.”
Abundance Investment’s managing director Bruce Davis
“The treasury is still fixated on technologies which hark back to the fossil fuel era. If the Chancellor wanted to ease the hard path to growth he would encourage investment in proven renewable technologies such as onshore wind and solar which can provide long term jobs and sustainable growth to all the regions of the UK.
“There is a danger that 20th century economic orthodoxy will blind us to the solutions that can deliver a 21st century green economy.”
Heat pump manufacturer, Daikin UK’s Henk van den Berg
“Yet again this budget has ignored the clear case for shifting the Climate Change Levy’s focus away from electricity to gas, leaving low-carbon heating out in the cold. A heat pump will typically save 5-10% in annual running costs compared to a gas boiler, but the prospect of further savings is being strangled by what’s basically an outdated tax on the electricity that powers them.
“If heat pumps are to become mainstream and support the UK’s net zero ambition, more needs to be done to prevent us from falling behind other countries in the global green race. While financial support from the government is still in place, the benefits of heat pumps versus fossil fuel systems need to be properly communicated to encourage better uptake of the Boiler Upgrade Scheme, bringing forward a ban on installing gas boilers in new homes, and clearer training support for installers.”
LCP Delta’s partner Chris Matson
“This scale of investment is certainly welcome news and can provide a ‘low regrets’ option for the government in decarbonising the electricity sector, supporting the deployment of CO2 and hydrogen infrastructure in industrial clusters, and positioning the UK as a global leader in CCUS.
“CCUS provides a route to a net-zero power system and is an essential technology in helping Britain reduce emissions. LCP Delta analysis suggests that with government renewable ambitions, deploying around 7GW of Gas CCUS (equivalent to 10 – 12 power plants) by 2030, alongside other technologies such as hydrogen and energy storage, would provide net benefits, and it is therefore encouraging to see funds made available to make progress toward this. It is vital that this investment support begins filtering through as soon as possible and that the industry is given the thumbs up that it needs on ready to go projects so that construction can begin.
“Decarbonising the electricity system is essential and can pave the way to decarbonising other critical sectors such as heating and transport. It is equally important that these sectors see future investment as part of the government’s net zero goals.”
It may well be that renewables get more attention towards the end of the month. The Climate Change Committee’s chief executive noted on Twitter that the Government could be saving for a “green moment”, with a new (and hopefully lawful) Net-Zero Strategy and a response to Skidmore Net-Zero Review set to be published in the coming weeks.
Has the nuclear announcement been well received?
Hunt confirmed that nuclear would officially be considered “environmentally sustainable” and will be updated in the green taxonomy. The Chancellor has also unveiled a new support package for nuclear in the UK, including a new innovation fund competition for Small Modular Reactors (SMRs).
This will likely be a contentious issue for green groups, with many arguing that renewables are a more reliable, lower-cost way to help the nation reach net-zero. Early comments suggest that nuclear has a role to play in diversifying the UK’s energy mix.
Energy Systems Catapult’s chief executive Guy Newey
“Support for nuclear has been steadfast for 20 years, but progress has been slow. This Budget focused not on the big projects, but more on SMRs. In addition to the competition, the government has already committed to investing £210m into the Rolls-Royce SMR project. Only by committing to a standardised nuclear program can we sustain the learning curve and trigger the virtuous cycle of economic performance as supply chain capabilities are developed, and perceived technological, project delivery, and financial risks fall. This vote of confidence from government is welcome and will help to further diversify our energy mix.
“It is great to see this support for the big stuff. The next challenge for the government to start grappling with is how this smorgasbord of new clean technologies is going to fit together. This is as big an innovation challenge as any of the progress we have made on renewables and means unlocking the potential of flexible technologies like storage and demand side response. If we don’t get this right, the faint sound of our creaking grid will get louder.”
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Disappointing and yet another missed opportunity to get to grips with and address the climate crisis. The Chancellor has left most of the pieces of the jigsaw in the box.