On Wednesday 30 October 2024, the Chancellor delivered her first autumn budget, announcing changes to tax, spending and benefits.
But what announcements impact the climate and your energy bills? To answer that, our policy experts have provided insight into what the UK Government has announced, and what we would have liked to see.
What did the Chancellor announce in the autumn budget?
Great British Energy funding and headquarters
In the autumn budget, the Chancellor announced that the UK Government would allocate £100 million for clean energy project development. The National Wealth Fund will deliver this while GB Energy is set up.
Also, £25 million will be available in 2025-26 for Energy to set up its headquarters in Aberdeen.
Funding for home energy efficiency
The Chancellor announced that the UK Government would take the first steps in its Warm Homes Plan.
This involves:
An initial £3.4 billion investment over the next three years to improve home energy efficiency and switch to low carbon technologies (LCT).
£1.8 billion of this will go towards fuel poverty schemes. This should to help over 225,000 low-income households to lower their annual energy bills by over £200.
Increased funding for the Boiler Upgrade Scheme in England and Wales due to high demand.
Funding to help heat pump manufacturers meet this demand.
The certainty that this funding provides will be welcome news for the LCT industry, who can now plan around this. The UK Government is considering further funding for the Warm Homes Plan as part of the spending review in the Spring.
The UK Government has claimed that its Warm Homes Plan will, over the course of this parliament:
lift 1 million homes out of fuel poverty
make energy efficiency improvements to 5 million homes.
More support for electric vehicles
There are now more than 1 million electric vehicles (EVs) on UK roads. The Chancellor announced that more support will be available to help with the transition to the 2035 new petrol and diesel car ban. This includes:
Investing over £200 million in 2025-26 to install more EV chargepoints. This will include support to local authorities who want to install on-street chargepoints across England. There are currently over 70,000 chargepoints across the UK.
First Year Rates for car tax on EVs will stay at £10 until 2029-30.
Supporting the purchase of new electric vans and the manufacture of wheelchair accessible EVs with £120 million in 2025-26 via the plug-in vehicle grant.
More funding for active travel
The Chancellor announced an additional £100 million investment in active travel infrastructure in 2025-26. This funding is to support Local Authorities to install cycling infrastructure and upgrade pavements and paths.
Increasing windfall tax
The Energy Profits Levy – commonly known as a windfall tax - applies to profits gas and oil companies make, which was previously set at 35%.
The Chancellor confirmed in the autumn budget that this tax would increase to 38% from 1 November 2024 and would run until 31 March 2030.
In its election manifesto, the UK Government said energy windfall taxes would help pay for the creation of GB Energy.
Our response to the 2024 autumn budget
Responding to today’s Autumn Budget, Mike Thornton, chief executive of Energy Saving Trust said:
“Building on the UK Government’s stated ambition to establish energy security and achieve net zero, this budget had some encouraging developments and will provide increased certainty to industry.
“We welcome confirmation of investment into the Warm Homes Plan which aims to reduce energy bills for lower income households by £200 through energy efficiency. It’s good to see a refreshed commitment to scale up the roll out of heat pumps by supporting both people with the upfront cost and the supply chain to deliver. Incentivising low carbon transport, including confirmation of investment in EV infrastructure, was also an encouraging key theme of this budget.
“We want to see a net zero future which benefits everyone with warmer homes, clean air and stable energy prices and look forward to more detailed plans from the UK Government over the coming months on how this can be delivered.”
What we’d liked to have seen
Here’s what our policy experts would have liked to have seen in the budget:
Further incentives to support the roll out of clean heat
It was a positive to hear that we can expect an increase in funding for the Boiler Upgrade Scheme. However, more still needs to be done to make heat pumps an attractive offer to consumers.
This would involve:
Setting out the policy options to rebalance electricity levies so electricity isn’t so much more expensive than gas and means a heat pump is cheaper to run than a gas boiler.
Introducing the Clean Heat Market Mechanism, which would support more people in getting a heat pump.
Introducing the Future Homes Standard, so all new homes are built with low carbon heating.
Commenting on the autumn budget, Stew Horne, head of policy at Energy Saving Trust, said:
“Accelerating the rollout of low carbon heat is something that there has been little detail on since UK Government came to power.
“Progress around key enabling policies on budget day to make the consumer offer more attractive would be extremely welcome.
“We know from our delivery experience in Scotland that access to impartial, expert advice, alongside attractive green finance options, can drive forward low carbon heating uptake. The UK Government should set up a national energy advice service in England to give people the confidence to make the switch to low carbon heating.”
More information on the Warm Homes Plan
It was welcome to see some more details on the Warm Home Plan. But we’re still waiting on a clearer picture on how the government will deliver the plan. We’d also like to see how the UK Government intends to meet its 5 million homes target.
More support for community energy
The UK Government’s Local Power Plan will support community energy projects. This will help small and medium-scale energy generators who have the potential to lower local energy bills to scale.
There are several challenges in setting up a community energy project. So, we want to see more detail from the UK Government on how it will provide support, knowledge and resources for these projects to thrive.
For more information, read our blog that shows how local areas are already seeing the benefits of community energy.
What has the government already done?
The new UK Government has only been in power for a few months. But it has already taken some steps towards its mission of making Britain ‘a clean energy superpower’. The first of these was the creation of Great British Energy (GB Energy).
And in recent weeks, we’ve seen a few other changes in UK Government energy policy.
Scrapping the universal Winter Fuel Payment
The Winter Fuel Payment will now be a means-tested payment, meaning it’s meant older people who receive certain benefits from winter 2024-25.
To qualify you must have been born before 23 September 1958 and be claiming one of the following benefits:
Pension Credit
Universal Credit
income-related Employment and Support Allowance (ESA)
income-based Jobseeker’s Allowance (JSA)
Income Support
Child Tax Credit
Working Tax Credit
It’s thought that many people who are eligible for Pension Credit haven’t applied for it, so it’s worth checking if you’re eligible.
Previously, the Winter Fuel Payment was a universal benefit for anyone born before 23 September 1958.
Funding for carbon capture
The UK Government has recently pledged £22 billion over 25 years to fund carbon capture and storage (CCUS) projects in Merseyside and Teesside. And the chancellor confirmed that £3.9 billion will be available in 2025-26 for the first CCUS projects.
These projects will capture CO2 from industrial processes before it goes into the atmosphere. Instead, it’s stored underground where it remains for tens of thousands of years.
These projects should remove 8.5 million tonnes of CO2 emissions each year.
Improvements to building energy standards
The UK Government intends to consult on raising the minimum standards for EPC ratings in privately rented homes from E to C. If this change went ahead, it would encourage landlords to install energy efficiency measures.
This should make these homes warmer, less prone to condensation and damp, and cheaper to heat.
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