Reports: Budget to include new energy efficiency and EV subsidies to spur net-zero progress

Javid will unveil his first Budget on 11 March. Image: Creative Britain

According to reports in The Times, the Treasury is considering proposals that would see the subsidy and grant packages available for individuals looking to buy a new electric vehicle (EV) increased to £3,500 and extended beyond their planned closure this spring.

The Government received stark criticism of its plans to reduce and axe some EV funding pots last year, including from its own Committee on Climate Change (CCC), as transport is currently the UK’s most-emitting sector. Boris Johnson last week moved the UK’s ban on new petrol and diesel car sales forward from 2040 to 2035, as per CCC recommendations, and the new subsidy moves would support this transition.

Javid and his team are reportedly also considering new mandatory energy efficiency targets for social housing, schools and hospitals – bolstered by fresh Government funding for measures such as triple-glazing, roof insulation and LED lighting.

Cash incentives for housebuilders, landlords and homeowners looking to phase out gas boilers and fit rooftop solar arrays are also on the cards, Conservative Party sources told the paper.

Aside from transport, the built environment and energy are two of the UK’s largest emitters. Green groups have repeatedly called for stronger policy action around retrofitting existing buildings – homes in particular; decarbonising heat and supporting small-scale solar generation.

The Treasury said in a statement that it “does not speculate ahead of the Budget”.

However, the reported proposals chime in well with the Government’s decision to restructure plans to deliver COP26 in Glasgow this November. Former UK energy minister Claire O’Neill was removed from her post as COP26 president less than a fortnight ago as part of Boris Johnson’s decision to re-strategise around the running of the summit.

The Budget announcement will be made on 11 March.

Who pays?

The Treasury is currently reviewing the total cost of meeting the UK’s 2050 net-zero target and exploring the ways in which costs should be paid.

The review is also assessing the economic opportunities the UK could seize from the net-zero transition, in terms of metrics such as job creation, avoided healthcare costs and natural capital.

Reports suggest that the Treasury is preparing to set aside £9bn for energy efficiency, EVs and renewable energy generation in next month’s Budget. While the majority of this funding would come from Government coffers, the Treasury may also be considering proposals first put forward by the architects of the UK’s Green New Deal proposals, including Clive Lewis and Caroline Lucas.

In order to best “share the cost” and create a just transition for those from low-income homes and communities, the proposals state, pension tax relief could be cut for top earners, or a new tax imposed on owners of Britain’s most expensive homes.

During her tenure as Energy Minister, Claire O’Neill said policymakers would only follow advice on reaching net-zero which would not exclude entire regions or social classes from the transition to carbon neutrality. But Boris Johnson’s reshuffled cabinet has made no public commitment to continue this claim, with the likes of Ed Miliband and Mary Robinson warning that the UK Government has more to do to ensure a socially just net-zero transition.

Sarah George

Comments (1)

  1. Keiron Shatwell says:

    Incentives for development of "slot in" alternative wet central heating boilers would be a good start. At present there is no viable alternative to heating the water in common wet heating systems. Heat Pumps don’t get hot enough to do the job efficiently and effectively as current CH requires water temperatures of 65-70 C which Heat Pumps, at present, can not reach.

    So to change from gas or oil heating you need to completely replace the entire system. Boiler, Radiator and all the hundreds of meters of pipework at a cost of tens of thousands of pounds.

    Encourage someone to develop a "Thermodynamic" system than can simply slot into the system and replace the boiler and still provide water to 70 C.

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