Chancellor Jeremy Hunt outlined the UK’s plans for economic progress, focusing on Enterprise, Employment, Education, Everywhere.
Opening with a confident, positive statement which was subsequently met with jeers from the opposition, Hunt declared “I am reporting today on a British economy which has proved the doubters wrong… the UK will not enter a technical recession this year.”
The OBR forecast that the economy will contract just 0.2% this year, avoiding major economic disruption. The conservatives have also outlined a strategy to more than half inflation, approaching the 2 per cent target with a forecast fall in inflation from 10.7 per cent in the final quarter of last year to just 2.9 per cent by the end of 2023. In spite of Hunt’s optimism, it cannot be ignored that the UK is the only nation of the G7 group that hasn’t recovered to its pre-pandemic size, and the average UK household is still worse off than pre-pandemic days.
As for the green sector, Hunt made some significant and somewhat controversial announcements. Firstly, nuclear power will be reclassified as “environmentally sustainable” which will grant it access to the same investment incentives and opportunities as renewable energy. This runs alongside a £700m investment in the divisive Sizewell C nuclear plant. Hunt will also be launching Great British nuclear in a bid for nuclear power to provide one quarter of the UK’s energy by 2050.
A positive injection for the green economy surrounds carbon capture. The chancellor announced a £20bn support package for carbon capture which is expected to support up to 50,000 jobs, attract significant private sector investment, and capture 20-30 million tonnes of CO2 every year by 2030.
Finally, the Climate Change Agreement scheme will be extended for two years, generating £60m tax relief for eligible businesses for energy efficiency measures.
“Today’s budget provides a welcome shift away from the UK’s reliance on overseas gas. However, the emphasis on nuclear as the solution is troubling. The reclassification of nuclear as ‘environmentally sustainable’ doesn’t reflect the well-known challenges with waste and safe decommissioning of nuclear sites.
“Meanwhile, the UK is home to a vibrant base of renewable firms, and a world leader in wind generation, but the budget seems a missed opportunity to drive change with meaningful policy to stimulate demand beyond the existing Climate Change Agreement scheme. The energy mix must include both renewables and demand reduction if net zero is to become a reality.”
Hunt signposted the conservatives as champions of the green energy transitioning, stating “almost 90 per cent of our solar power was installed in the last 134 years, show that it’s the conservatives who fix the roof when the sun is shining”; a statement which is contestable at best.
Amid the energy crisis, the Energy Price Guarantee (EPG) will be extended until the end of June, capping energy prices at £2,500 for the average user and saving households a further £160 a year on top of current energy relief measures. Energy charges for prepayment meters, which impact 4 million of the UK’s poorest households, will be brought in line with prices for customers paying direct debit, providing relief for the UK’s poorest households.
Overall, the positive message to take away is that the UK will avoid a technical recession. However, the chancellor’s growth strategies are certainly ambitious and, regardless of taxes and inflation, the average UK household is still worse off than a year ago.
21 November 2024
19 November 2024
