On March 15th 2023, the Chancellor Jeremy Hunt unveiled his Spring Budget. This sets out how the government will raise money through taxes, and what they’ll spend it on.
With this budget the government had a great opportunity to tackle the cost of living, energy and climate crises at the same time. But did they rise to the occasion? Let’s find out.
What was announced in the budget?
The budget included news on energy bills, some bizarre funding decisions, and a few big gaps. Here’s what you need to know.
Energy bills
- The government has extended its scheme to keep home energy bills down. Under the Energy Price Guarantee the government pays part of everyone’s energy bills to help make them more affordable.
- The scheme will now continue until June. However, another programme called the Energy Bills Support scheme ends in April, so bills will still increase.
- They’re also scrapping extra costs for people who pay for their energy in advance. This will help people on lower incomes, who are often forced to use ‘prepayment’ energy meters by their energy suppliers.
- These measures do nothing to solve the underlying problem. It’s important to ease the immediate pain of the energy crisis. But without a lasting solution, we’ll be stuck with cold, draughty houses. And we won’t be shielded from the next global gas crisis.
Nuclear power
- The government will co-fund companies developing small nuclear reactors.
- These reactors don’t exist at the moment. And if they ever do manage to generate energy, it’s very likely it’ll be much more expensive than wind and solar power.
- They’re also classifying nuclear power as ‘green energy’. This could give it access to the same investment as renewable sources.
- Nuclear power plants take years and years to build. We don’t have that time to tackle the climate emergency. Renewables are much quicker, allowing us to reduce emissions now. And the UK still has no solution for dealing with nuclear waste.
Carbon capture
- The government will also support carbon capture technology. They’ve committed to spend up to £20bn on this.
- Carbon capture has never worked on a large scale despite decades of trying. In theory, it allows polluting factories and power plants to keep running by capturing and burying their carbon emissions. But so far the real-world results have been disappointing.
- Carbon Capture is not a zero carbon solution when it requires fossil fuels to be produced because of so-called ‘upstream’ emissions, so it’ll be extra hard to get to net zero emissions using it
What’s missing from the budget?
With this budget, the government had a chance to fix some of the things they’ve been getting wrong. But they’ve kept ignoring these problems. Here are some things the government should have done, but didn’t:
- UK homes waste huge amounts of energy because they don’t have enough insulation. We need a bold, nationwide insulation programme to fix this. The Covid vaccine rollout is a good template for the speed and scale to aim for.
- There’s also nothing in the budget for modern electric boilers (known as heat pumps). These are a proven alternative to polluting, wasteful gas boilers. The government should be helping people make the switch as fast as possible because they can be expensive upfront.
- Solar panels and wind turbines on land are the cheapest sources of energy we have, but they could be doing much more. The government should scrap the needless barriers to building more onshore wind power. And they should invest much more in solar energy.
- Closing the windfall tax loophole for oil and gas would go a long way towards covering costs for these measures – but this budget failed to take that opportunity.
- Overall, the UK is missing out on the benefits of green tech. A good government would invest in renewable energy across all our heat, power and transport systems. Doing this would get us on track to meet our climate goals. To keep our position as a global leader on climate change, we need to match the US and EU’s generous new funding for green industries.
The quickest and cheapest way to cut bills is to insulate homes, and swap gas boilers for heat pumps. The government knows this, but they’re still failing to take action.
