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Megan Batchelor: The Autumn Statement was a win for environmentalists

Despite some recent wobbly rhetoric on net zero, yesterday’s Autumn Statement made it clear that the government recognises the economic and electoral opportunity it can bring. We were treated to a wave of measures designed to boost Britain's green industrial capacity and defang planning obstacles to net zero.

Most notably, the Chancellor’s speech delivered investment tax cuts, announced plans to fix our grid infrastructure, provided added financial support for manufacturing, and did it all in a way that will ensure local communities are rewarded.

Megan Batchelor Climate Programme Officer

One of the most impactful announcements was making ‘full expensing’ permanent to spur investment in Britain’s clean manufacturing sector. This permanent tax relief will help offset the amount of tax they pay on their profits by their amount of plant and machinery investment.

Net zero will require a lot of upfront capital. Permanent tax cuts like this will be crucial for alleviating the pressures of recent rise in global supply chain costs and will incentivise businesses to invest here, rather than the USA or China. The relief will also help other sectors to upgrade their machinery to new models, which tend to be cleaner and more efficient.

The announcements on community benefits will help ensure that we continue to bring local communities with us on the road to net zero. By providing £1,000 off people’s energy bills over the next 10 years for those living near pylons and electricity substations, developers can incentivise communities to support, rather than block, deployment of low-carbon projects. The government should go further and make community benefits mandatory, rather than the proposed voluntary approach.

On top of easing community concerns to build more grid capacity, the government’s plan for streamlining the grid connection process will ensure new green projects are not unnecessarily delayed in the queue. Its policies will help to cut expensive and time-consuming red tape on boosting homegrown British energy generation and help to cut the long-run cost of managing the electricity system.

To top it off, the government is committing £960 million to support the UK clean energy manufacturing sector. The aim of this is to build up British supply chain capacity for clean technologies, such as carbon capture utilisation and storage, electricity networks, hydrogen, nuclear power, and offshore wind. Capturing more of the low-carbon supply chain will be important for us to improve our resilience to changes on international markets, while also helping to secure investment and more British jobs.

Net zero is a big challenge and the Chancellor’s announcements are a step in the right direction, yet there is scope to go further and maximise the bang we get for our buck.

A lack of long-term, energy efficiency action was disappointing. Incentives to reduce the amount of wasted heat through better insulation, lowering people’s energy bills and keeping homes warmer, are imperative. This is an area crying out for tax cuts. Slashing stamp duty (an already unpopular tax) for people who upgrade their home’s energy efficiency, implementing salary sacrifice schemes for upgrades, and making landlords’ investments in the energy efficiency of their properties tax-deductible are some of the many options the government could go for.

All in all, this statement surpassed expectations: there were some great announcements for net zero that will boost the British economy and help to cut energy bills. The Chancellor should contemplate further measures in the lead up to spring to fully reap the political and economic rewards that action on climate change can bring.


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