Budget Reaction & Green Investment

Following on from yesterday’s budget, green economists and businesses have been giving their reaction. Find out more below:

Yesterday the Chancellor, Jeremy Hunt, provided the government’s Spring Budget, which included the following announcements for the energy sector:

  • Extension of the oil & gas windfall tax until 2029, raising an additional £1.5bn
  • Developing GB Nuclear and pushing ahead the Small Modular Reactor selection process to ensure that a quarter of the UK’s energy is generated by nuclear by 2050
  • Purchasing potential nuclear sites in North Wales from Hitachi for £160m
  • £120m fund for developing energy supply chains, green technology and creating faster grid connectivity
  • £270m fund for the motor and aerospace industries to streamline the process of creating clean transport

Despite these announcements, experts have said that opportunities were missed to boost the UK’s economy through the green industry. Many pointed to the fact that much of the economy was stagnant in 2023 but the net zero economy grew by 9%. Accelerating renewables, insulation of homes, rollout of heat pumps and uptake of electric vehicles were not addressed in the budget, whilst fuel duty was frozen potentially implying the message that the government favours the driving of petrol and diesel cars over public transport investment. However, advocates of nuclear power were enticed by the announcements of the next phase of the small modular reactor projects and the purchasing of sites from Hitachi.

Also following the budget, was the announcement that the UK’s green power industry would receive a £10bn pledge for a battery storage portfolio that would become the biggest in the country. NatPower is poised to submit applications for three locations with the potential of another ten to follow. The facilities will play a key role in helping to decarbonise the UK’s power grid, with two of the sites being located in the north of England. The investment will be seen as much needed, with waiting lists for solar and wind projects reaching 15 years and the current battery storage industry being fragmented.

Overall, however, there is a feeling that the government has left the UK without a clear strategy to help unlock similar investment projects alongside struggling to reach net-zero by 2050. Ed Miliband, the shadow energy secretary, argued that the budget reflected the fact that the government has ‘given up when it comes to making Britain a clean energy superpower’. In an election year, Labour will be hoping to convince both the electorate and industry that it has stronger green credentials.