Industry has responded thick and fast to yesterday’s budget announcements. Here we take a look at just a selection of the comments sent through:
Rebecca Armstrong, CEO, Making Energy Greener:
“I have been eagerly awaiting Labour’s first budget in almost 15 years, particularly to see how it would address both the climate crisis and the rising energy bills costs. I’m pleased the Chancellor has provided clarity on one of Keir Starmer’s key election pledges: the launch of GB Energy. However, I believe more action is needed to relieve the stress on households struggling with soaring energy prices. I was pleased to see much needed investment in Labour’s Warm Homes Plan, which promises to lift millions homes out of fuel poverty and make an additional 5m homes more energy efficient. While I support the idea of tax incentives for this plan with caution, I am concerned, as a business owner, about potential increases in capital gains tax and employer national insurance, which is already the second-largest profit stream in Britain. Nonetheless, as an industry, we are ready to help the government transform the UK into a clean energy superpower. Achieving this vision, however, must start with addressing fuel poverty and helping everyday people.”
Comment from Andy Sutton, co-founder & chief innovation officer at Sero:
“£3.4bn into the Warm Homes Plan over the next three years is a welcome confirmation. Whilst it’s arguable if this is more or less than the sector was expecting from past pledges by this and previous governments, it’s beyond doubt that this level of funding will need to be very significantly supplemented to achieve the >£100bn required to raise our social housing stock to Net Zero.
“£1bn towards making buildings safe is also very welcome, and we hope reflects a growing recognition that quality, safe and healthy outcomes are fundamental requirements that cannot be taken for granted. We’re pleased to see this ties up with recent enforcement around the quality of retrofit delivery, and proof this is delivered in practice.
“What wasn’t said, or maybe I just missed, was an appetite to tackle the bigger questions – electricity vs gas price rebalancing to aid electrification of heat; tax reforms to support decarbonisation measures; scope reforms for rent or service charges to provide investment vehicles; and digitisation to drive data-led actual performance outcomes.
“Hence it’s a welcome budget, but there’s still a long way to go in the UK’s Net Zero journey.”
Phil Kent, CEO of Gravis:
“The Labour government’s commitment to making the UK a clean energy superpower was a positive re-enforcement of their policy promises and commitments to hire 300 more planners and work with the National Energy System Operator and Ofgem to accelerate grid connections are also welcome to unlocking development. Gravis continues to believe that this presents a material opportunity for investment and growth in the UK and is needed to keep us on track with our decarbonisation commitments.
“Infrastructure and clean energy pledges included £8bn for carbon capture, usage and storage infrastructure and includes 11 green hydrogen projects. There is also support for four new electrolytic hydrogen projects across Scotland and Wales, £200m for electric vehicle charging infrastructure, support for port infrastructure to facilitate floating offshore wind (£134m), and £125m for Great British Energy in 2025/26 with £100bn over 5 years.
“However, while the list is encouraging, it feels somewhat unambitious given the scale of investment needed to deliver on binding obligations in the UK’s sixth carbon budget and the 2030 grid decarbonisation objective. For example, £125m for GB Energy is small when compared with the c. £65bn needed to deliver on the 140 GW of installed renewable capacity (up from c. 57 GW) committed to as part of Labour’s manifesto.
“What is positive is that there does not appear to have been a winding back on Labour’s position of putting the UK energy transition second only to economic growth. Infrastructure and Net Zero form two of the seven ‘pillars’ identified to support the Growth Mission and are recognised as enablers of others.
“There was, however, no material change in the pace and level of support that we consider is needed to achieve the stated ambitions. A 10-year infrastructure strategy will be published in the spring of 2025 and a ‘Clean Power 2030 Action Plan’ has also been committed to. Both are expected to contain more detail than has been provided today on how Labour’s commitment to decarbonise the electricity grid by 2030, and support wider infrastructure deployment, will be achieved. If this detail is not forthcoming, those ambitions are looking increasingly unlikely to be achievable.”
Giles Hanglin, CEO of Apatura Energy:
“To realise the new Labour government’s plans to make Britain a clean energy superpower, we must think about the circular economy. It’s reassuring to see such investment in a cleaner future; however, funds alone do not secure a clean future for the country. A circular economy lasts longer than a prime minister’s term in office.
“If implemented appropriately, we believe today’s budget could be labelled the ‘greenest budget in UK history’, a step towards a world fully powered by clean, renewable energy. But this budget is about much more than the environment: it’s a huge step towards energy independence and futureproofing our resources.”
“By committing to “making Britain a clean energy superpower,”, the long-term decision to invest in green infrastructure is not just the best decision for the planet; it puts the UK on a more secure footing in geopolitical terms.
“It’s not just the commitment to cleaner energy that makes this budget so promising. Whilst the overall economy grew just 0.1% in 2023, the ‘green economy’ grew 9%, evidencing that the decision to invest heavily in renewables is also the sensible financial approach from the new Labour government. The tax incentives for capital investment as well as the oil and gas windfall tax increases to 38% in this new budget will further strengthen investment in the sector.
“It’s promising to hear investment in the North of England and Scotland. For example, out of the 11 new hydrogen plants, three are set to be located in Bridgend, East Renfrewshire and Barrow-in-Furness. At Apatura, we’ve already identified that Scotland is brimming with untapped potential as a site for BESS, solving the problem of bottlenecked energy transits.
“One area we were disappointed not to get the attention it deserves was data centres. In 2022, data centres accounted for just 2.5% of the UK’s electricity consumption, but with the National Grid expecting this figure to increase six-fold by 2035, the Government must have a coherent strategy to match the ever-increasing demand.”
Thomas Farquhar, co-founder of Liverpool-based low-carbon start-up Heatio:
“This Budget is a mixed bag in terms of the government’s commitment to net zero. On the positive side, funding for heat pumps has been extended as well as key investment supporting domestic manufacturing of the technology. There are also welcome, clear ambitions in the Warmer Homes scheme, which promotes solar and heat pump installations. The government’s £3.4 billion additional funding for 350,000 homes, including 250,000 low-income homes, is especially good news and a step forward in making energy savings accessible for all, especially those most affected by fuel poverty.
“Encouragingly, the Budget continues to incentivise electric vehicles, enabling us to build on the one million EVs already on the road.
“However, it is disappointing that there is nothing new about deploying more low-carbon tech in British homes; the Clean Heat Market Mechanism is also absent, which will undoubtedly kick-start fossil fuel boiler manufacturers in supplying heat pumps and supporting consumers to transition to green heating technology for their homes.
“The lack of action or clarification on the Future Home Standards is also a missed opportunity. Continuing to build new homes without the basics required to combat climate change makes no sense. The Future Homes Standard should include heat pumps, solar panels and batteries as a standard requirement. The government has also missed the opportunity to bring forward fossil fuel boiler bans on new builds and retrofits.”
Charlotte Lee, Chief Executive of the Heat Pump Association:
“Given the challenging economic climate, it’s promising to see an initial commitment of £3.4bn towards heat decarbonisation and household energy efficiency over the next three years, as well as an increase in funding for the Boiler Upgrade Scheme for the next two years. However, more needs to be done to support the acceleration of the electrification of heat if the UK is to stay on track and meet the carbon emission reduction targets in line with the legal obligations. We therefore await the details of Phase 2 of the Spending Review with interest.”
Don Mclean, CEO of IES:
“The budget’s lack of focus on green investment for buildings is a missed opportunity. It overlooks the potential for job creation, energy cost savings, and technological innovation that could stem from a robust green building initiative.
“Investing in the decarbonisation of the built environment is not just an environmental imperative – it’s an economic one. By neglecting this sector, we risk falling behind in the global race towards sustainable development and missing out on the economic benefits that come with being a leader in green technology and practices.”
Beatrice Barleon, Head of Policy and Public Affairs, EngineeringUK:
“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.”
Yselkla Farmer, CEO of BEAMA, the UK trade association for energy infrastructure and systems:
“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.”
Anthony Ainsworth, Chief Operating Officer at npower Business Solutions:
“Businesses have been waiting to see if this Budget would deliver tax tricks or treats, and it’s fair to say that it is a mixed bag. From an energy and net zero perspective, the Chancellor confirmed several announcements that had already been made, including investment in carbon capture and storage (CCUS) and green hydrogen, reaffirming its commitment to launch GB Energy, and the confirmation that clean energy is one of the government’s priority areas for economic growth, as outlined in its recent Industrial Strategy Green Paper.
“When looking at the detail, the Budget also confirmed £163 million to continue the Industrial Energy Transformation Fund over 2025-26 to 2027-28, which will be welcome news for energy intensive industries. It also said it would maintain incentives for electric vehicles (EVs), which is good news for those businesses with electric fleets, and that the government intends to publish a more detailed Clean Power 2030 Action Plan.
“That said, as well as public investment, we also know that investments made by businesses will be critical to meeting the UK’s clean power and net zero ambitions.
“Many companies across the UK have already taken huge steps in decarbonising their operations. However, the concern will be that some of the measures announced today will hit the bottom line, which could have an impact on business investment in sustainability strategies and energy reduction measures.
“Our latest Business Energy Tracker highlighted this issue – businesses told us they know the benefit low-carbon investments can bring, but bigger economic pressures are preventing them from doing so. Therefore, it would have been welcome to see more measures to incentivise energy efficiency, or more detailed sector plans for net zero.
“Getting business behind net zero and the UK’s wider clean energy ambitions will be crucial to economic growth, so we will await more detail over the next few months.”
Nicola Riley, Senior Director, Net Zero Infrastructure, at Turley:
“The Chancellor’s announcement to unlock the National Wealth Fund to invest in the industries of the future, provide funding for 11 new green hydrogen projects across the UK, and reinforce the Government’s commitment to Great British Energy, marks an exciting step in Labour’s mission to drive the UK’s transformation into a green energy powerhouse.
“With a significant £8.3 billion market intervention previously outlined, Labour’s plan for GB Energy will help accelerate renewable infrastructure, enhancing energy security, and reducing household bills.
“Moving forward we hope to see the Government utilising the National Wealth Fund to its full potential, to support direct investment in ports, hydrogen and industrial clusters, in order to drive economic growth if Labour is to achieve its commitment of full clean energy by 2030.”
Siobahn Miekle, Eaton’s VP for Northern Europe:
“We know the Government is committed to making the UK a clean energy superpower. However, while the measures in the Budget today support this aim, but they do not go far enough. They overlook a significant issue: supporting businesses on the energy transition. Commercial buildings devour a third of the nation’s power, yet the support to greening them remains unclear.
“While today’s Budget champions our renewable future, transforming energy hungry businesses requires more than bold declarations. We need smart storage solutions and flexible power systems that work when nature takes a break.
“Without clear market frameworks to unlock private investment in these vital technologies, our clean energy dreams risk remaining just that – dreams. The Government has shown the destination; now it must build the bridge to get us there.”
Russell Dean, Deputy Divisional Manager, Living Environmental Systems at Mitsubishi Electric
“Decarbonising the built environment is vital for the UK to reach its ambitious goal of net-zero carbon by 2050, and changing how we heat the UK’s housing stock will be instrumental in this. This Budget was the new Labour government’s opportunity to demonstrate its commitment to clean energy and decarbonisation, and the investment into Great British Energy and the Warm Homes Plan is a welcome step. But we urge the government to go further in outlining a clear, long-term strategy to reach net-zero.
“The government’s commitment to building 1.5 million new homes is welcome, but these new homes must be future-proofed, through initiatives like the Future Homes Standard, and not need retrofitting in just a few years as standards change. We must also do more to convey urgency around the need for house builders to prioritise renewables now.
“We also call for a rebalancing of electricity levies or the decoupling of the price of electricity and gas, to bring down the price of electricity and make all-important renewable technologies, like heat pumps, a more affordable option for homeowners.”
Om Shankar, General Manager & Vice President, Konect (EV charging provider):
“The government has previously stated its aim to accelerate the rollout of electric vehicle charging, but the budget falls woefully short in this area.
“We need a 500% increase in public EV chargers between now and the end of the decade to meet our stated goals and projected EV demand.
“Consultation is one thing, but sooner or later the government needs to show its hand. Some urgent action and lateral thinking on location of charge points and support for operators is needed.”
Ian Jones, CEO of WKE:
“As an alternative fuels manufacturer, we’re disappointed by the government’s lack of targeted support for our sector in this Budget. While Labour’s focus on decarbonisation through the National Wealth Fund is promising, much more is needed at the industry level to ensure a practical and achievable energy transition – especially for heavy industries like power generation and steel.
“This Budget needed to address immediate energy security, not just far-flung efforts to tackle long-term energy challenges. We need a collective policy that engages with a diverse range of energy sources – including alternative fuels. Many of these are homegrown, available now and will reduce the UK’s reliance on imported energy and fossil fuels from the get-go.
“Raising employers’ national insurance seems counterintuitive to the government’s stated aim of fostering investment and economic growth. This alone could hinder investment, growth and job creation at a critical time.
“Labour had the chance to position our industry as an economic driver and part of the UK’s decarbonisation solution. Instead, we’re left facing the same uncertainties.”
Terry Allan, CEO of nexos – a UK engineering, procurement and construction (EPC) provider across oil and gas and new energy sources:
“With an increased energy profits levy at 38% and the removal of the 29% 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, alongsidee merging 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.”
