Autumn Budget 2024: Experts Weigh In on Government’s Strategic Measures to Navigate Economic Challenges
Posted by: electime 30th October 2024
As the UK government unveils its Autumn Budget 2024, industry leaders express a mix of optimism and concern regarding the future of the nation’s energy sector and environmental commitments. Here are some comments from key companies in the energy, engineering and electrical sectors:
John Bamford, Head of Advisory, EcoAct Northern Europe, says:
“Today’s budget risks stalling the UK’s net-zero progress at a critical moment. With the UNFCCC Global Stocktake approaching in 2025, the alignment between our NDC commitments and policy implementation requires attention – nearly half of required emissions reductions by 2030 need stronger delivery plans, while transition costs are set to increase five-fold.”
He adds: “As other major economies accelerate their green investment frameworks, the UK must maintain its pioneering momentum in transition finance and corporate transformation planning. Clear policy signals and robust reporting standards are essential to give British businesses the certainty they need in an increasingly competitive global race to net-zero. This is crucial not only for meeting our international climate obligations but for securing the UK’s position in the growing market for green products and services.”
Terry Allan, CEO of nexos- a UK engineering, procurement and construction (EPC) provider across oil and gas and new energy sources said:
“With an increased energy profits levy at 38 per cent and the removal of the 29 per cent investment allowance, the government’s approach risks a double fault on our energy future, undercutting the very security and job protection it aims to support. Oil and gas, alongside emerging renewables, such as the 11 green hydrogen projects announced today, form an essential partnership in our energy transition, not competitors. The stability needed to power this shift is undermined by sudden changes, threatening both investment and innovation across the energy sector. Removing incentives for reinvestment could sideline essential UK projects, pushing companies to look elsewhere and leaving our workforce and energy security vulnerable. Rather than fostering agility and cooperation, these new policies may well hinder our ability to play the long game for a sustainable, next-gen energy future.”
George Morrison, CEO of Aquaterra Energy commented:
“The government’s commitment to 11 new green hydrogen projects and £22bn for CCS is a promising nod toward the future of the UK energy sector. Yet, with ongoing challenges from the effects of the profits levy, potential alone won’t cut it. The North Sea’s future relies on swift regulatory action, strategic infrastructure investment, and robust supply chain support, alongside targeted measures to advance electrolyzer technology for green hydrogen at scale. Only with these in place can we bring these projects from paper to powerhouse.”
Kelly Becker, President, Schneider Electric UK and Ireland, Belgium and Netherlands, says:
“The Government has made good progress to support UK business and manufacturing. Schneider Electric welcomes the commitments to deliver an Industrial Strategy and the Budget’s commitments to maintaining funding for the Industrial Energy Transformation Fund, the Public Sector Decarbonisation Scheme, and Made Smarter. We also welcome clarity on the future tax landscape, including a cap on Corporation Tax at 25 per cent for this Parliament and retention of full expensing as well as a commitment to explore extending it to leased assets when fiscal conditions allow. These measures will support manufacturers and wider business to continue to invest in the UK.”
“However, we would have liked to see commitments to supporting the manufacturing supply chain that will play a key role in delivering the industrial and green growth ambitions set by the Government. Whilst we welcome the support for residential and public sector building decarbonisation, the UK also needs a clear roadmap for decarbonising the commercial and industrial sectors.”
“Finally, at a time when UK manufacturers are struggling to hire skilled workers and compete with the EU and the US, we need measures that will support business and economic growth. We question how increasing the cost of employment is aligned with the government’s mission to grow the economy and deliver prosperity.”
Yselkla Farmer, CEO of BEAMA, the UK trade association for energy infrastructure and systems, says:
“The Chancellor’s budget has stepped up urgently needed investment tackling the UK’s key decarbonisation heating and transport challenges. Reaffirming the £3.4bn Warm Homes Plan investment is positive but it is essential the Government fleshes out the practical details of its approach with cost-effective, impactful measures such as on heating controls and improving indoor air quality to protect health.
“Incentivising EV uptake for company cars through tax relief is positive for decarbonising transport and alongside the £2bn for UK EV manufacturing will boost this vital sector. However, the freezing of fuel duty continues to send mixed messages to motorists.
“Making big investment pledges sends a valuable political signal but the Government urgently needs to grasp the nettle on trickier details that will drive decarbonisation in people’s lives and bring long term financial and quality of life benefits. The UK’s £14bn turnover Net Zero supply chain is ready to support this but needs a more ambitious policy and regulatory framework to match these financial signals.
“The commitment to 1.5 million new homes is encouraging, but immediate clarity is needed on the Future Homes Standards is crucial so that developers and housebuilders, especially SME housebuilders, can cost and plan accordingly for future much needed housing developments.”
Beatrice Barleon, Head of Policy and Public Affairs, EngineeringUK, responds to the Autumn Budget
“We welcome the Chancellor’s commitment to invest in education and skills as a central pillar of the Government’s growth agenda, not least through the creation of Skills England and the announcement of a £40 million pot to develop new foundation and shorter apprenticeships in key sectors. We look forward to continuing to support the Government to develop a new Growth and Skills Levy, ensuring an apprenticeships system that provides ample routes into engineering and technology careers for young people.
The pledges of significant funding uplifts for school budgets and further education colleges will be key to addressing the teacher recruitment crisis, which is particularly acute in STEM subjects. To resolve the teacher workforce crisis in the long-term, this must be accompanied by a similar commitment to teacher retention, such as by reversing short-sighted cuts to subject-specific CPD for STEM teachers.
Moreover, the announcement of a series of new energy and infrastructure projects, such as green hydrogen plants and carbon capture and storage facilities, underscores the centrality of ensuring an engineering and technology workforce that is fit for the future to achieve the Government’s mission of turning the UK into a clean energy superpower.
Ahead of the publication of the full industrial strategy next Spring, we look forward to supporting the Government with the development of sector plans for key growth-driving industries, many of which depend heavily upon the supply of skilled engineers and technologists.”
Brian Berry, Chief Executive of the FMB, commented:
“The Budget was the first opportunity for the new Government to set out its long-term financial plans for the country. In challenging economic conditions, the Chancellor of the Exchequer delivered a mixed Budget with promising plans for the long-term future of the construction industry, however it is likely to present substantial challenges to firms managing their business finances. At a time when SME builders are needing a boost, they may, like many in the country, have to take a hit before they see things get better.”
“The Chancellor’s decision to significantly increase employers’ National Insurance contributions will create major headaches for firms looking to take on staff at a time when the building industry in desperate need of new workers. However, it is good that the Chancellor has shielded small companies by increasing Employment Allowance, as is the rise in the Apprenticeship wage which will help increase the appeal of a career in construction for young people. Capital Gains increases may also hit builders looking to sell off their companies when they look to retire.”
“The FMB has been calling for more details of the Government’s plans to improve the energy efficiency of the UK’s homes, a key pledge in Labour’s election manifesto. The announcement of £3.2bn to fund the Warm Homes Plan will be crucial to getting more SME building companies to enter the retrofit market. The announcement of additional support for SME house builders to access low-cost loans is also welcome, and alongside the announcements on housebuilding made in recent months, offers hope for the future. SMEs have a crucial role to play in plans to get Britain building again, and it is vital that the Government does not lose sight of the challenges the sector continues to face.”
Chris Claydon, Chief Executive of JTL said:
“JTL welcomes much of what has been announced today, including support for skills challenges in key sectors which the Government acknowledges is holding back growth across the country. It is imperative that Independent Training Providers can also access the funding pledged to work towards a more level playing field.
“Apprenticeships in the electrical and plumbing trades directly support the growth the Chancellor has pointed to today, such as infrastructure development and delivering new homes. The skills pipeline created by apprenticeships is a lifeline to industry and training providers are straining to meet demand. While there is no doubt the sector will rise to the challenge of future demands, we need a systems-thinking approach from the heart of government to get there.”
