A tale of missing ‘E’s: The green economy reacts to the Spring Statement

Chancellor Jeremy Hunt’s first Budget elicits a decidedly mixed reaction from the green economy

Addressing Parliament earlier today, Chancellor Jeremy Hunt’s said the focus of his first Budget was on four ‘E’s – enterprise, employment, education and everywhere. But players across the green economy were quick to point out the government’s package of policies and tax changes was notably bereft of focus on three other critical ‘E’s that are planks of a prosperous economy: environment, energy, and efficiency.

The confirmation of long-awaited plans to invest in small-scale nuclear and carbon capture were broadly welcomed as measures that could put the UK at the forefront of new industries and boost the UK’s low carbon domestic energy supplies. Meanwhile, fuel poverty campaigners expressed a collective sigh of relief as Hunt confirmed he would extend energy bill support for households.

But businesses, NGOs, and think tanks decried the Spring Statement’s lack of focus on boosting more established and inexpensive clean energy technologies, such as solar, wind, and energy efficiency measures. The Chancellor stands accused of neglecting a number of long-term solutions to the high energy bills causing so much pain to British households and businesses, given the plan’s lack of focus on improving energy efficiency, investing in public transport and active transport infrastructure, or pressing ahead with lifting the ban on onshore wind in England.

Plans to devolve more power to local authorities and set up investment zones with a mandate to ramp up green industries have been applauded, as were fresh tax credits for research-intensive firms and a new capital allowance scheme designed to make the UK a more enticing place for corporate investment. 

But green economy players noted the Chancellor’s plan for the year ahead fails to respond to the generous new green subsidy programmes in the US and EU. As such, Hunt has done little to assuage widespread concern the UK is falling behind in the race to secure investment in rapidly-growing clean energy markets.

Here, BusinessGreen rounds up all of the reaction from the green economy.

 

Keir Starmer, Leader of the Opposition, said:

“Britain has enormous potential. On science, innovation, technology, we should be leading, not lagging. We need an industrial strategy that removes barriers to investment.

“The announcements today are nowhere near the mark. The lowest investment in the G7, that’s their record. All our competitors know this. They’re gearing up for an almighty race for the opportunities of tomorrow. We’ve got to be on the start line, not back in the changing room, tying our laces.

“He mentions the war in Ukraine. And of course on this side of the house we stand with Ukraine, and we stand with the government’s response to Putin’s brutality… But what we cannot accept is the use of the war as a blanket excuse for failure. Our economy has weak foundations, global crises hurt Britain more than other countries.

“Wages in this country are lower now in real terms than they were 13 years ago. The average French family is a tenth richer. The average German family is a fifth richer. Countries which faced the same pandemic and countries which face the same war. The war didn’t ban onshore wind, the war didn’t scrap our home insulation scheme, the war didn’t run down our gas storage facilities. They did. Decisions which hurt working people battling the cost of living crisis right now.

“It’s been the same story for the whole 13 years, always the sticking plaster, never the cure. Today’s budget does nothing to change that.”

 

Caroline Lucas, Green Party MP for Brighton Pavilion, said:

“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.” 

 

 Jason Torrance, interim chief executive at UK100, said:

“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.

“Finally, the move to shift control from Whitehall to regional mayors should be celebrated as a big step in the right direction – but we need to see more detail. The same with investment zones.

“Today’s announcement has a huge potential to unlock the power of local. But it musn’t come at the expense of vital environmental and climate protections. To ensure the UK can fulfil its bet zero local and regional leaders need the power – and resources – to take the lead on ensuring their residents’ homes are warm and comfortable and shaping local energy networks to be more responsive to community needs.”

 

Juliet Phillips, senior policy advisor at E3G said: 

“With the main energy efficiency focus today on swimming pools, rather than addressing fuel poverty, the government has missed a huge opportunity to wean the UK off expensive fossil fuel dependence. 

Steps to support households with sky-high energy bills are welcome, but only a sticking plaster solution until we invest in long-term, structural solutions to boost UK energy security. The fastest way to do this is through insulating our buildings, electrifying our heating systems and boosting cheap clean renewables.” 

 

Helen Clarkson, CEO of Climate Group, said:

“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.”

 

Cara Jenkinson, cities manager at climate solutions charity Ashden, said:

“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 was a chance for the Chancellor to clearly set out that not only did the UK government recognise that focusing on energy efficiency would support citizens through the energy and cost of living crises, but would show the government is continuing to take action on the climate crisis too.

“Instead, 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.” 

 

Sam Hall, director of the Conservative Environment Network, said:

“The measures announced by the Chancellor today take us closer to net zero. Extra funding for carbon capture and small nuclear reactors could cut carbon, grow the economy, and create jobs.

“The Chancellor is right to champion the UK as a world leader in cheap, homegrown renewables thanks to Conservative policies like the Contracts for Difference. But with the USA and EU offering enormous green subsidies, the UK needs to up its game to remain an attractive place to invest in wind and solar. 

“Introducing full capital expensing is very welcome, and it will help attract more investment in renewable generation and the supply chain. But bolder action is needed to encourage businesses to choose Britain for building the next generation of clean industries like sustainable aviation fuel and green hydrogen.

“Setting out further measures over the coming months will not only signal the UK’s intent to win the green industrial revolution race to investors, but it will also demonstrate the Conservative Party’s environmental ambitions to voters ahead of the next election.”

 

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

“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.  

“With industries such as steel, increasingly viewing hydrogen as the energy source of the future, the development of carbon capture and storage is now less critical than it once was. CCS is starting to look like a technology aimed at prolonging the life of the fossil fuel industry – funded by the taxpayer and higher bills. 

“Nuclear power is much more expensive than renewables and innovations in energy storage will soon make it redundant for balancing energy needs during periods of low wind or solar. Investment in this sector is simply throwing good money after bad.

“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.” 

 

Sarah Mukherjee, CEO of the Institute for Environmental Management and Assessment (IEMA), said:

“The extension of the energy price cap is welcome news for households up and down the country, struggling to manage the soaring costs of their energy bills.

“With the Climate Change Committee warning only last week that we risk failing to meet our 2035 net zero electricity target, investment in cleaner forms of energy generation and technology at today’s Budget are also welcome. However, a more joined-up approach to investment in the energy sector continues to be required if we are to achieve our long-term decarbonisation goals.

“Investing in people, through green jobs and skills, is ultimately critical to delivering a cleaner and more sustainable energy sector in the UK .”

 

Sam Alvis, head of economy at Green Alliance, said:

“Extending the energy price guarantee and ending the premium of prepayment meters are vital interventions to protect households from ever higher energy costs. Yet this Budget doesn’t do enough to address the reasons why this country and its households are so exposed to volatile fossil fuel prices.

“With the US and Europe spending huge sums on clean energy and green technologies like electric vehicles, we needed a Budget that would encourage businesses to invest a green pound here rather than a green dollar or euro elsewhere. Instead, it feels like we are developing short term investment schemes instead of a long term plan for building the green economy of the future. 

“We got an undated promise of £1bn a year for carbon capture and a programme for investment zones that should support climate and nature targets while enhancing green research and development. The new capital allowance scheme will bring forward some green investment, but the chancellor should have done more to encourage a focus on green skills and green technology like offshore wind.

“A UK response to the US’ plans is expected shortly, but today showed the UK is still reacting rather than leading, and losing time and opportunities as a result.”

 

Fran Boait, executive director at Positive Money, said:

“This Budget marks another missed opportunity to redistribute the burden of higher costs onto those with the broadest shoulders. Rather than properly taxing windfall profits, the Chancellor has chosen to continue saddling workers with suppressed wages and inadequate funding for vital services. 

“The solution is unmissable at this point – even Thatcher taxed the banks when they thrived whilst the rest of the economy waded through a recession. That’s just one way we can pay for the support people really need this year.”

 

Kate Norgrove, director of advocacy and campaigns at WWF, said:

“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.”

 

Nick Williams, transport managing director at Lloyds Banking Group, said:

“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.”

 

Alethea Warrington, senior campaigner at climate charity Possible, said:

“People around the country are in desperate need of lower energy bills and the cheap, clean renewables that would bring them down for good. Instead the Chancellor has decided to throw public money at locking us into reliance on expensive, polluting gas power, with the addition of unproven and risky carbon capture and storage, which will  cost us all even more.

“New onshore wind and solar projects are the cheapest forms of energy generation and could come online quickly with the right policies. The public knows that clean energy is the obvious solution to the energy cost crisis but it’s the solution the government, bafflingly, continues to reject.”

 

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