- Rachel Reeves’ first budget sets billions aside for the environment
- Warm Homes Plan to be launched with more than £3 billion
- Budget receives mixed reviews
Chancellor Rachel Reeves has reaffirmed the government’s goal to turn the UK into a ‘clean energy superpower’ by committing billions of pounds for low-carbon technology and green industries, but she has been criticised for not going far enough.
Reeves said the government will spend in a number of areas, including solar panels, heat pumps, insulation and transitioning the country towards electric vehicles (EVs).
Since its victory in the latest general election, the Labour Party has made cutting bills a priority, It hopes to achieve this by making the UK energy independent through renewable sources and low-carbon technology.
Despite reaffirming many of its existing sustainability goals, there have been calls for more to be spent on heating decarbonisation, with some saying that the government’s plans aren’t enough to ensure the UK hits its net-zero emissions targets.
2024 Autumn Budget at a glance
The full Budget Statement is 170 pages long, however we’ve taken the sustainability-related highlights.
- Great British Energy – the new national energy company which will be headquartered in Aberdeen, with £125 million in initial funding.
- The Warm Homes Plan – an initiative to make households cheaper and cleaner to run by helping people install solar panels and heat pumps and to insulate their home, worth £3.4 billion between 2025 and 2028. Reeves announced an initial £1 billion for the initiative.
- Boiler Upgrade Scheme – more funds, details yet to be announced
- National Wealth Fund – launched to mobilise billions of pounds of investment into the UK’s world leading clean energy and growth industries and support the delivery of the Industrial Strategy.
- Clean energy – industries will be supported and £163 million will be given to existing firms to decarbonise as part of the Industrial Energy Transformation.
- Approved four major solar projects – amounting to nearly 2GW, which the government said will enable the creation of thousands of jobs.
- Offshore energy – approximately £134 million will be spent on port infrastructure to facilitate floating offshore wind.
- Nuclear power – there is £2.7 billion to continue developing the Sizewall C nuclear power plant; further plans on the project will be decided in 2025.
- EVs – encourage the transition to EVs, the government has kept the Vehicle Excise Duty (VED) at £10 while increasing it for hybrid and petrol vehicles.
Reaction
The government has set aside billions for the energy transition, in particular LCT, which is a big plus. The reaction as to whether or not it is enough has so far been mixed.
Naked Energy
Christophe Williams CEO, Naked Energy, said net-zero goals “haven’t been properly addressed” and that heat decabonisation has been “woefully neglected”.
Because heat demand accounts for 40% of the UK’s total emissions, tackling it is “critical” if the country is going to achieve its climate goals.
According to Williams, the Warm Homes Plan should be extended to the commercial sector, and said it is “baffling” that the government hasn’t sought to do so as industry demands the most energy but is also the hardest to decarbonise.
“It’s here that the Government needs to step in. The continued commitment to the Public Sector Decarbonisation Scheme should be viewed as the bare minimum, and we can’t rest on our laurels if we are to decarbonise our heat demand.
“We’ve already seen over a decade of inaction when it comes to heat decarbonisation, and the climate crisis isn’t getting better.”
MCS Foundation
However, this view is not shared by the MCS Foundation, which has welcomed the money for the Warm Homes Plan and the extra money – not yet specified – for the Boiler Upgrade Scheme. David Cowdrey, acting chief executive said it was “encouraging” to see the success of the Boiler Upgrade Scheme being recognised with more funds, but insisted more needed to be done.
“The UK is still lagging at the bottom of European league tables for heat pump deployment. We need a comprehensive set of funded policies to remove barriers to the rollout of heat pumps, including moving social and environmental levies off electricity bills to reduce costs,” Cowdrey said.
“Despite the Government’s promise of certainty, we are still awaiting the Future Homes Standard and the Clean Heat Market Mechanism, two essential drivers for increasing heat pump deployment.”
Greenpeace
Ami McCarthy, head of politics, Greenpeace UK, also welcomed the Budget:
“This was the Chancellor’s first big test on climate and nature. While there is still much work to be done, Rachel Reeves has taken a step towards her one-time ambition of being the ‘first green Chancellor.
“The Chancellor must use the additional funds to go further and faster on green measures that will boost the economy, and tackle the climate and cost of living crises at the same time, like home insulation, public transport, and jobs in industries of the future.”
