The industry welcomed government announcements delivered in the Spring Budget this week, but many have warned that the proposals do not go far enough.
Chancellor Jeremy Hunt announced that the government will maintain the Energy Price guarantee for another three months. The government has also extended the Climate Change Agreement (CCA) scheme until March 2027, which gives eligible businesses access to reduced tax rates if they meet negotiated energy efficiency or emission reduction targets.
The government will create 12 Investment Zones across the UK focused on key industrial and research hubs, with incentives including tax reliefs and grant funding, which will also need to support the UK’s path to net zero by 2050, become climate resilient, and support the new long-term targets to protect and enhance nature.
It has also committed to new, deeper devolution deals, models, funding and to expand local retention of business rates to more areas in the next Parliament.
But Simon McWhirter, director of external affairs & deputy chief executive at UKGBC, said the government’s Energy Efficiency Taskforce and £600 million extension of energy-saving tax relief “falls short of the scale of investment needed”.
McWhirter said: “Energy efficiency remains a key missing piece of the green economy puzzle.
“The scale of our climate emergency requires investment of at least £6 billion a year to comprehensively upgrade home energy efficiency across the UK, supported by more creative solutions like an energy-saving stamp duty incentive. These measures would slash energy bills, create 500,000 skilled jobs, and save the NHS £1.4 billion every year.
“It is encouraging that the government’s new Investment Zones must support the UK’s path to net zero, climate resilience and natural recovery goals. It will be crucial that these zones meet robust environmental standards.
“UKGBC members across the UK continue to set an ambitious pace for transforming their business models for net zero carbon growth – the government must use forthcoming responses to Mission Zero and the updated Net Zero Strategy to set out a detailed and credible delivery plan to achieve net zero by 2050.”
Ami McCarthy, Greenpeace UK’s political campaigner, called the Budget "misguided" and said it showed "the stranglehold fossil fuel and nuclear lobbies have on this government" and "why else would it take such a dangerous gamble on unproven technologies?"
McCarthy added: “Squandering taxpayers’ money on nuclear reactors that don’t even exist yet and fanciful carbon capture is irresponsible, and does nothing to reduce our emissions now. Committing to £20bn over 20 years is frankly pathetic compared to the green growth investments being made in the US, EU and China.
“The government must instead prioritise renewables, invest in a smarter grid, and insulate people’s homes at the scale we need to keep us warm, save money on bills, and bring down carbon emissions.”
Paul Wrighton, director of sustainable infrastructure at Johnson Controls, said the chancellor’s action on energy – especially the extension of the Climate Change Agreement scheme – "sends a relatively positive message, however, the lack of clear ring-fenced funding for wider energy-efficiency measures is disappointing, especially at a time when cost pressures for households and businesses are going nowhere fast".
Wrighton added: “What was missing from the budget was a bold, fresh programme promoting heat pump uptake and other energy efficiency opportunities – heat pumps especially are a no-brainer for cost, efficiency and sustainability compared with old gas boilers.
"The current boiler upgrade scheme has a budget of £150 million each year for three years and aims to issue 30,000 vouchers annually. But in the first eight months of operation, only 9,888 grants were awarded. There’s a huge opportunity to put tension on the matter with a real nationwide programme to accelerate the change.
"What we need to see now is the government supporting businesses in getting the technical assistance they need directly or via industry partnerships so they can identify opportunities to reduce emissions and develop a plan to transition to net zero. This could include providing access to experts in energy efficiency, renewable energy, or other relevant fields. It’s also important for the government to facilitate knowledge sharing and best practices by creating networks or platforms for businesses to share information and ideas about how to reduce emissions.”
Kam Singh, director of carbon solutions at EMCOR UK, said businesses had to take the initiative now that the government would cancel their energy scheme. He said: “The new government support scheme will offer varying levels of support depending on the energy usage of a particular industry. However, I would implore all businesses to understand their own energy profiles and not be reliant on any government support. With the benefit of an energy profile, businesses can make astute decisions, reduce energy use and protect themselves from future market volatility through price risk management practices.”
The chancellor also introduced a white paper on disability workplace reform as part of an aim to address the two million people who are economically inactive owing to disability or long-term sickness. It also announced "an ambitious package of welfare measures to incentivise work and provide even more job support for Universal Credit claimants".
The government also said that employer-led occupational health services "can reduce health-related inactivity by identifying, monitoring and preventing health problems in the workplace". To support more businesses to provide occupational health services, the government will expand the forthcoming occupational health pilot subsidy scheme for small and medium-sized businesses announced by the Department for Health and Social Care and DWP in 2021. The government will also launch a separate consultation on options for incentivising greater take-up of occupational health provision through the tax system.
Jasmine Hudson, chief people officer at Mitie, said: “We welcome the government’s new measures to support and encourage more people back into work. As a people business welcoming colleagues from all stages of life, we know our diversity makes us stronger. But we must address the long-term skills challenge to secure the future of Britain. Industries, such as electric vehicles, green energy and connectivity, cannot rely solely on the skills of an older workforce. We also need to attract new generations.
“Education and employment must go hand in hand. To achieve Britain’s ambition for sustainable economic growth, it is vital we continue to invest in nurturing new skills by helping more people of all ages access quality apprenticeships. More must be done to accelerate the launch of dedicated courses which support the growth of our green economy and deliver on Britain’s Net Zero and levelling-up agendas.”