Rishi Sunak confirms £3bn energy efficiency programme and promises to deliver green recovery, but fails to deliver wider stimulus measures
Chancellor Rishi Sunak has again reiterated the government's commitment to engineering a "green recovery", confirming plans for a new £3bn energy efficiency programme and promising that the UK's stimulus package will have "concern for the environment at its heart".
But his much-anticipated Summer Economic Update provided little new support for green infrastructure beyond the previously trailed energy efficiency programme, leaving environmental campaigners somewhat underwhelmed by the latest package of measures.
Sunak said the government's recovery plans would be delivered in three phases, with initial emergency measures to avert mass job losses and bankruptcies, now followed by a new "Plan for Jobs" to protect and create new jobs as the furlough scheme is phase out. He added that a third phase "where we will rebuild" would follow in the coming months.
As such, much of his speech focused on a raft of job protection and creation measures, including a new bonus scheme for companies that take back furloughed workers, a "Kickstarter" scheme to subsidise firms that hire people aged 16 to 24, an expansion of trainee and skills programmes, and a VAT cut and meal voucher scheme to help stimulate demand across the hospitality and tourism sectors.
However, Sunak also stressed that the government wanted to "create green jobs" and would deliver a "green recovery with concern for our environment at its heart".
As such, he confirmed previously announced plans for a new year-long £3bn energy efficiency programme, including £1bn to upgrade public buildings such as schools and hospitals and a £2bn Green Homes Grant.
"From September, homeowners and landlords will be able to apply for vouchers to make their homes more energy efficient and create local jobs," Sunak explained. "The grants will cover at least two thirds of the cost, up to £5,000 per household. And for low income households, we'll go even further with vouchers covering the full cost - up to £10,000."
He said the scheme would be accompanied by a £50m fund to pilot the right approach to decarbonise social housing, which is expected to support Energiesprong-style initiatives that deliver whole house retrofits.
Sunak said that taken together the measures would make over 650,000 homes more energy efficient; save households up to £300 a year on their bills; cut carbon emissions by more than half a mega tonne a year, equivalent to taking 270,000 cars off the road; and support around 140,000 green jobs.
In documents published following his speech, the Treasury confirmed a number of further green initiatives that were trailed last week by Prime Minister Boris Johnson would feature in the new jobs plan.
For example, a Green Jobs Challenge Fund is to provide up to £40m to help environmental charities and public authorities create and protect 5,000 jobs in England that are focused on improving the natural environment.
Moreover, the government has committed to provide £100m of new funding for researching and developing Direct Air Capture technologies, as well as a further £10m for the first wave of innovative R&D projects to scale up manufacturing of the latest technology in batteries, motors, electronics and fuel cells.
The Treasury added that the government is also calling upon industry to "put forward investment proposals for the UK's first 'gigafactory' and supporting supply chains to mass manufacture cutting-edge batteries for the next generation of electric vehicles".
And alongside the promised £1bn to improve the energy efficiency of public buildings it confirmed plans for £40m of investment to improve the environmental sustainability of the courts and tribunals estate in England and Wales.
However, further support measures for hydrogen, carbon capture, renewables, tree-planting, electric vehicles, and other green sectors - all of which have reportedly been under consideration by the government - were notable by their absence.
Green business groups welcomed the latest measures, but warned a more comprehensive plan would be required by the autumn if the government wanted to deliver on its "green recovery" rhetoric and put the UK on track to meet its net zero emissions targets.
"The specific climate and environment initiatives announced by the Chancellor are welcome and the speed of delivery is an acceleration in the right direction, but these good steps need to be put inside a recovery plan that has a clear vision for a thriving net zero UK economy at its heart," said Eliot Whittington, director at The Prince of Wales's Corporate Leaders Group. "By the Autumn Budget we need to see a clear strategy that gets Britain back to work, gives business the confidence to invest in a resilient, zero carbon future and shows our peers around the world what leadership looks like."
His comments were echoed by Ben Combes, assistant director at PwC, who said the latest measures were "a crucial first step", but the hope was that they represented "just the start of the scale and ambition required to transform our buildings, skills, and our broader economy as part of the green recovery".
However, Green MP Caroline Lucas offered a blunt assessment of the government's latest plans. "This was yet another government statement which didn't live up the hype and does very little in the face of the huge challenges we face," she said. "For all the promises, repeated again, that this would be a green recovery with concern for the environment at its heart, all we got was a rehash of announcements made earlier this week on a voucher scheme for home insulation - covering less than three per cent of homes in England.
"While this is work that desperately needs to be done to tackle emissions from buildings, the scale of what the government is proposing will have a minimal impact, cutting just 0.14 per cent of UK emissions. It's a pittance in the face of what's needed."
Sunak's speech came on the same day as it emerged that climate litigation group Plan B is threatening legal action over the government's bailouts of carbon intensive industries, which it argues could be in breach of the UK's net zero emissions targets and Paris Agreement obligations.
It also came as fresh polling from YouGov again highlighted strong public support for the government to increase spending on climate-related measures.
The pollster reported that the coronavirus crisis has "not kicked environmental issues into the long grass", with a quarter of Brits ranking the environment as one of the most important issues facing the UK, making it a top four issue for the public.
"Although the environment was seen as a more important issue prior to the start of the coronavirus pandemic in March (33 per cent), it has remained around the same level as it was roughly a year ago," YouGov said. "Additionally, it is significantly higher now compared to previous years; the percentage of people in 2018 ranking the environment as a top issue never rose higher than 18 per cent, and in 2017 it ranked lower than 10 per cent more often than it did above."
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