Budget 2023: Chancellor backs nuclear and carbon capture in ‘energy reset’ – but leaves ‘glaring gaps’ in onshore wind, creaking grid, home insulation
The chancellor today skirted round contentious topics like onshore wind and home insulation in his budget, but did promise cash for nuclear power, carbon capture and energy bills.
The underlying commitment to net zero and clean energy were generally welcomed.
But campaigners have accused Jeremy Hunt of prioritising risky, “fanciful” technologies – such as machines that suck up carbon dioxide and bury it underground – over proven, but politically difficult, climate policies like boosting onshore renewables.
There is also widespread concern the budget does little to compete with the hundreds of billions unveiled by the US and EU to stimulate green growth investment, risking the UK falling behind in the “green industrial revolution”.
Nuclear reaction
A key announcement was that nuclear is to be classed as “environmentally sustainable”, subject to consultation, in a bid to pull in investment in the same way enjoyed by renewable energy.
Nuclear is costly and lengthy to build but provides reliable power without the pollution.
Government climate advisers say some nuclear power is vital to the UK’s clean energy future.
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£20bn allocated to Carbon Capture Storage
But the chancellor was criticised for rehashing old pledges.
He gleefully announced Great British Nuclear, an agency designed to revive the nuclear industry – but this has been promised before.
“The chancellor’s words on nuclear give a positive message, but it’s more like a ‘greatest hits’ compilation from the past, rather than anything new,” said Professor Adrian Bull, BNFL chair in Nuclear Energy and Society at the Dalton Nuclear Institute at Manchester University.
The government also announced a competition for mini reactors known as “small modular reactors (SMRs)”, which are not yet widely available.
If this young technology is “demonstrated to be viable” the government will “co-fund this exciting new technology”, the chancellor said.
This too resembles a previous announcement. In 2015 then-chancellor George Osborne launched a competition to identify the best design and get one built in the 2020s – a target yet to be hit.
Chris Stark, chief executive of the government’s climate advisors the Climate Change Committee (CCC), said nuclear seems to “have been announced and re-announced so many times”.
“SMRs [sic] would be useful if they are delivered as quickly as promised. Whether they will be though…” he wrote on Twitter.
Carbon capture, utilisation and storage
Another leap of faith, on top of the push for SMRs, is the push on carbon capture, utilisation and storage (CCUS).
It is an expensive technology, still in its infancy.
But the UK cannot afford to bypass CCUS, climate advisers said last week, because it is not cutting emissions enough.
Today the government pledged £20bn towards the technology in order to “increase resilience to future energy price shocks” – suggesting it would primarily be used to allow the UK to burn more gas, rather than to capture emissions from factories, for example.
Dr Steve Smith from Oxford University’s Smith School of Enterprise and the Environment said the funding was “good news” but needs extra policy decisions from government to become viable.
Some campaigners warn the UK is using it as an excuse not to cut emissions.
“Locking in reliance on gas power will increase our vulnerability to future energy price shocks, while adding in the additional costs, risks and uncertainty of trying to capture emissions from gas power plants,” said Alethea Warrington, senior campaigner at climate charity Possible.
“Including carbon capture will add even more costs, while being unproven to actually work and putting our climate, as well as our finances, at risk.”
Meanwhile Greenpeace called the £20bn over 20 years “frankly pathetic compared to the green growth investments being made in the US, EU and China”.
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Tom Heap investigates hydrogen’s role in the future of heating UK homes.
Capital expensing – and can the UK rival the US and EU’s mega green growth packages?
Sam Hall, director of the Conservative Environment Network, said today’s measures do bring the country closer to net zero.
He welcomed the announcement of full capital expensing for the next three years, saying it would help attract more investment in renewables and the supply chain. This should please the offshore wind sector.
“But with the USA and EU offering enormous green subsidies, the UK needs to up its game” to remain an attractive place to invest in wind and solar, as well as the next generation of clean industries like sustainable aviation fuel and green hydrogen, added Mr Hall.
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Experts are warning of the risk to rivers following the driest February for 30 years.
But the government will be talking more about net zero before the end of the month – the deadline by which it has to respond to a legal ruling on its net zero strategy.
The courts found the government’s net zero strategy was unlawful because it failed to outline how climate policies would meet legally binding carbon budgets – forcing ministers to rework their plans.
‘Zero mention of renewables’
Many were disappointed that the chancellor steered clear of lifting a de facto ban on onshore wind.
Antony Froggatt, of thinktank Chatham House’s Environment and Society Programme, said: “In the UK Budget there is zero mention of renewables and only £105m set aside for community supported energy efficiency compared to £235m funding for potholes.”
Onshore wind is politically contentious, with recent governments changing their minds on it.
Meanwhile, the EU and US are “rolling up their sleeves and supporting the domestic production of electric vehicles, solar panels and wind turbines, that will bring jobs now and make a difference in the 2020s”, said Mr Froggatt.
He warned the chancellor to “be careful the UK isn’t left at the starting line of this new and more competitive low carbon race.”
Friends of the Earth criticised the “glaring gap” in the budget on onshore wind and home insulation.
Energy bill help a ‘sticking plaster’ compared with home insulation
Good news amid the cost of living crisis came in the form of a decision to extend the energy price guarantee, which caps average household bills at £2,500, for a further three months to June.
It had been due to rise to £3,000 in April and the cost of scrapping the planned 20% increase will amount to around £3bn.
However, the chancellor stopped short of new commitments on home insulation, which advocates say would bring down household bills permanently.
In his autumn statement Hunt did pledge £6.6bn during this parliament for energy efficiency, and a further £6bn from 2025. But energy groups say £6bn a year is needed to upgrade leaky homes and promote heat pumps.
Insulation rates were over 90% higher in the 2000 and 2010s to 2013, at which point the Cameron administration “cut the green crap”, according to thinktank ECIU.
Jo-Jo Hubbard, CEO of network optimisation specialist Electron, called the energy bill support a “sticking plaster” that is “about to wash off.”
Upgrade the grid!
Instead the government should upgrade Britain’s outdated electricity network, added Ms Hubbard, one of many in the industry warning of the problems it is creating.
At the moment consumers are paying for wind to be switched off when the grid can’t handle the capacity. New power capacity is also waiting to be connected, said Ms Hubbard.
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Britain’s biggest high street lender is closing in on a deal to buy Curve, a provider of digital wallet technology that its new owner hopes will give it an edge in the race to build smarter online payments systems.
Sky News has learnt that Lloyds Banking Group could announce the acquisition of Curve for about £120m as soon as this week.
City sources said this weekend that the terms of a transaction had been agreed, although a formal announcement could yet slip to later in the month.
Lloyds has been in talks with Curve about a takeover for some time, with Sky News revealing that discussions were taking place in July.
The financial services giant, which owns the Halifax brand and operates the biggest bank branch network in the UK, believes Curve’s digital wallet platform will be a valuable asset amid growing regulatory pressure on Apple to open its payment services to rivals.
Curve was founded by Shachar Bialick, a former Israeli special forces soldier, in 2016, and was hailed as one of Britain’s most promising fintechs.
Three years later, Mr Bialick told an interviewer: “In 10 years’ time we are going to be IPOed [listed on the public equity markets]… and hopefully worth around $50bn to $60bn.”
The sale price may therefore be a disappointment to long-standing Curve shareholders, given that it raised £133m in its Series C funding round, which concluded in 2023.
That round included backing from Britannia, IDC Ventures, Cercano Management – the venture arm of Microsoft co-founder Paul Allen’s estate – and Outward VC.
Curve was also reported to have raised more than £40m last year, while reducing employee numbers and suspending its US expansion.
In total, the company has raised more than £200m in equity since it was founded.
Curve is being advised by KBW, part of the investment bank Stifel, on the discussions with Lloyds.
The company is chaired by the City grandee Lord Fink, who is also a shareholder in the company.
Curve has been positioned as a rival to Apple Pay in recent years, having initially launched as an app enabling consumers to combine their debit and credit cards in a single wallet.
Curve Pay is a digital wallet, which combines a person’s credit and debit cards into a single wallet
Lloyds is said to have identified Curve as a strategically attractive bid target as it pushes deeper into payments infrastructure under chief executive Charlie Nunn.
In March, the Financial Conduct Authority and Payment Systems Regulator began working with the Competition and Markets Authority to examine the implications of the growth of digital wallets owned by Apple and Google.
Lloyds owns stakes in a number of fintechs, including the banking-as-a-service platform Thought Machine, but has set expanding its tech capabilities as a key strategic objective.
The group employs more than 70,000 people and operates more than 700 branches across Britain.
Curve is chaired by Lord Fink, the former Man Group chief executive who has become a prolific investor in British technology start-ups.
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When he was appointed to the role in January, he said: “Working alongside Curve as an investor, I have had a ringside seat to the company’s unassailable and well-earned rise.
“Beginning as a card which combines all your cards into one, to the all-encompassing digital wallet it has evolved into, Curve offers a transformative financial management experience to its users.
“I am proud to have been part of the journey so far, and welcome the chance to support the company through its next, very significant period of growth.”
IDC Ventures, one of the investors in Curve’s Series C funding round, said at the time of its last major fundraising: “Thanks to their unique technology… they have the capability to intercept the transaction and supercharge the customer experience, with its Double Dip Rewards, [and] eliminating nasty hidden fees.
“And they do it seamlessly, without any need for the customer to change the cards they pay with.”
News of the talks between Lloyds and Curve comes days before Rachel Reeves, the chancellor, is expected to outline plans to bolster Britain’s fintech sector by endorsing a concierge service to match start-ups with investors.
Lloyds declined to comment, while Curve has been contacted for comment.
Union leaders are demanding no eleventh-hour retreat by the government on workers’ rights now their champion Angela Rayner is no longer in the cabinet.
As delegates gather in Brighton for the TUC’s annual conference, the movement’s leadership is claiming four million people – one in eight of the UK workforce – are in “pervasive” insecure work.
And union bosses are urging the government to stand firm and reject attempts by Tories and Liberal Democrats to weaken the former deputy prime minister’s Employment Rights Bill in its final stages in parliament.
The TUC’s general secretary, Paul Nowak, has claimed Ms Rayner, who resigned on Friday over unpaid stamp duty on a seaside flat, was a victim of misogyny and was being hounded out by right-wing politicians and right-wing media.
Paul Nowak believes Angela Rayner was a victim of misogyny
As well as Ms Rayner leaving the government, the other minister driving the bill through parliament, Jonathan Reynolds, was demoted in Sir Keir Starmer’s cabinet reshuffle from the senior post of business secretary to chief whip.
Until last week, Ms Rayner had been expected to deliver the keynote Labour Party speech at the TUC on Tuesday, but it emerged midweek that the education secretary, Bridget Phillipson, would be the speaker.
However, in Friday’s reshuffle she lost responsibility for adult skills – a key issue for the unions – to the new work and pensions secretary Pat McFadden, who will now head a new, beefed-up super-ministry promoting growth.
And ironically, the TUC conference in Brighton is taking place less than two miles from the luxury seaside flat in Hove, on which Ms Rayner’s avoidance of £40,000 in stamp duty led to her resignation as deputy PM, housing secretary and Labour deputy leader.
Just before parliament’s summer recess, the House of Lords backed by 304 votes to 160 a Tory-led amendment to Ms Rayner’s bill to reduce the qualifying period for unfair dismissal claims from two years to six months, rather than from day one, as proposed by Ms Rayner.
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The rise and fall of Angela Rayner
Third reading of the bill in the Lords was last Wednesday, the day of Ms Rayner’s Sky News confession, and the bill is now set for parliamentary ping-pong, assuming the government overturns the Lords’ amendments in the Commons.
But in a pre-conference interview with Sky News, TUC chief and Rayner supporter Mr Nowak demanded no diluting of her bill, which also includes banning zero hours contracts which exploit workers and fire and rehire.
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“We are now at a crucial stage in the delivery of the Employment Rights Bill, just weeks away from Royal Assent,” said Mr Nowak. “And our clear message to the government will be to deliver the bill and deliver it in full.
“Ignore the amendments from the unelected peers, Tory and Lib Dem peers in the House of Lords, that are aimed at gutting the legislation, weakening workers’ rights.
“Stand with the British public, deliver decent employment rights. That’s important in workplaces up and down the country, but it’s important because these are proposals that are popular with the British public as well.”
Education Secretary Bridget Phillipson will be making a speech at the TUC’s conference
The TUC says its analysis shows low-paid jobs in occupations such as the care, leisure and service sectors account for 77% of the increase in insecure jobs since 2011.
Black and ethnic minority ethnic workers account for 70% of the explosion in insecure work, according to the TUC, and southwest England and Yorkshire and Humber are insecure work hotspots.
Mr Nowak told Sky News: “We’ve got well over a million people now on zero-hours contracts. We’ve got millions of people who don’t have sick pay from day one and 70% of the kids who live in poverty have parents who go out to work.
“The government is absolutely right to be focused on making work pay. And the Employment Rights Bill is about putting more money in the pockets of working people, giving people more security at work.
“That’s good for workers, but it’s also good for good employers as well, so they’re not undercut by the cowboys.”
Speaking to Sky News last Wednesday, shortly after Ms Rayner’s tearful confession to Sky’s political editor Beth Rigby, Mr Nowak said: “There’s a real heavy dose of misogyny when it comes to Angela.
“Angela Rayner is playing a really important role in government and I wouldn’t want to see her hounded out of an important role by right-wing politicians and the right-wing media, who frankly can’t handle the fact that a working-class woman is our deputy prime minister.”
Londoners face almost a week of travel disruption when Underground workers go on strike next week.
There will be limited or no services for several days, and those services that are still running are expected to be busier than usual.
Members of the Rail, Maritime and Transport union (RMT) voted overwhelmingly for strike action after nine months of negotiations failed to resolve a long-running dispute over pay and conditions.
Transport for London (TfL) has offered a 3.4% pay rise which it described as “fair” but said it cannot afford to meet the RMT’s demand for a cut in the 35-hour working week.
Further talks have also failed to end in an agreement, but Nick Dent, London Underground’s director of customer operations, said it was not too late to call off the strikes before causing chaos in the capital.
Here is all you need to know.
When are strikes planned?
Strikes are planned from midnight on Sunday 7 September to 11.59pm on Thursday 11 September.
There is separate planned industrial action on 5 and 6 September, but this is not expected to cause disruption on TfL services.
The other days, however, will see delays across every underground line and the Docklands Light Railway (DLR).
Tube services will be limited for five working days next week. File pic: PA
What’s running – and what’s not?
Sunday 7 September:
• Disruption across the entire Tube network, with limited services running
• Those that are running will finish early, with TfL encouraging people to finish journeys by 6pm
• The DLR will be running a normal service
Monday 8 September:
Tube
• Little to no service running across the entire Tube network
• No service before 8am or after 6pm
DLR
• Full service, but stations shared with the Tube network may face disruption
Tuesday 9 September:
Tube
• Little to no service running across the entire Tube network
• No service before 8am or after 6pm
DLR
• No service on the entire network
Wednesday 9 September:
Tube
• Little to no service running across the entire Tube network
• No service before 8am or after 6pm
DLR
• Full service, but stations shared with the Tube network may face disruption
Thursday 11 September:
Tube
• Little to no service running across the entire Tube network
• No service before 8am or after 6pm
DLR
• No service on the entire network
Friday 12 September:
Tube
• No service before 8am
• Service will return to normal on all lines by late morning
DLR
• Normal service
What about the Elizabeth Line and Overground?
The Elizabeth Line, London Overground and trams will be running on strike days. London’s bus network is also expected to be running a full service.
However, TfL warns other services will be extremely busy and trains may be unable to stop at all stations or run to their normal destinations.
No strikes are planned on the Elizabeth Line, but trains will not stop at some stations. Pic: iStock
On Monday 8 and Wednesday 10 September, the Elizabeth line will not stop at the following stations before 7.30am and after 10.30pm:
• Liverpool Street
• Farringdon
• Tottenham Court Road
On Tuesday 9 and Thursday 11 September, trains will not stop at the same stations before 8am.
How to get around during the Tube strike
As always during industrial action, TfL urges commuters to plan ahead and allow extra time for their journeys.
To do this, use TfL’s journey planner, or apps including City Mapper.
Cycling or walking is also recommended by TfL, with Santander, Lime and Forest bikes available to hire across the capital, as well as electric scooters in some London boroughs.
TfL recommends commuters use bikes or walk round London during strikes. Pic: iStock
Have any events been cancelled?
As a result of the strike, Coldplay have rescheduled the final two dates of their 10-show run at Wembley Stadium.
The band posted a statement on social media to say their Music Of The Spheres shows on 7 and 8 September have been rescheduled to 6 and 12 September respectively.
“Without a Tube service, it’s impossible to get 82,000 people to the concert and home again safely, and therefore no event licence can be granted,” the band said.
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US singer-songwriter Post Malone has also rescheduled his two shows at Tottenham Hotspur Stadium on 7th and 8th September due to the strikes.
Tickets for both shows will remain valid for the rescheduled dates on 20th and 21st September.
Events for the BBC Proms are expected to still run throughout the week at the Royal Albert Hall until the last night on 13 September.
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