Ramping up energy efficiency is a no-brainer when it comes to cutting energy bills, ensuring security of supply and reducing climate-heating emissions. In Jeremy Hunt, the Conservatives appear to have found a brain. In the autumn statement, he pledged to double annual energy efficiency investment with new funding of £6bn.
That is the good news. The bad news is that doubling does not happen until 2025, when the energy bills crisis may be over and the climate crisis will be even worse. Hunt is the fourth chancellor of 2022 and the chaos in the Tory party has meant unnecessary delays in making people’s homes warmer and cheaper to heat.
The trouble goes back almost a decade in fact, when David Cameron’s ditching of “green crap” saw insulation rates fall by 95%, a decision that has cost bill payers billions. Details of the new efficiency plans are yet to be published but will include a new “energy efficiency taskforce”. Its goal will be to reduce the UK’s energy use in buildings and industry by 15% by 2030, a fairly modest ambition.
On the supply of low-carbon energy, Hunt backed expensive nuclear power as well as offshore wind, but said nothing on the fastest and by far the cheapest sources: onshore wind and solar. With blocks on the latter, the Tories continue to be wildly out of tune with voters.
Hunt increased the windfall tax on soaring oil and gas profits from 25% to 35%, making the total tax rate 75%. That may look high, but remember that the oil and gas belongs to the nation – you and me – not the fossil fuel companies, and other nations like Norway have higher rates.
A windfall tax on electricity producers of 45%, including wind, solar and nuclear, was also announced by Hunt. Depending on how that is implemented, the green energy companies could end up being taxed more than the fossil fuel producers. That would be mad when green energy is the solution to the energy and climate crisis, and while oil and gas firms can get 91% tax rebates by investing in more oil and gas.
Electric car sales are in the fast lane and Hunt announced that from 2025, owners will need to start paying vehicle excise duty, sometimes misleadingly referred to as “road tax”. That is a disincentive to go electric but by that date electric cars will not only be cheaper to run, as they already are, but also very probably cheaper to buy than petrol or diesel models.
On the climate crisis, Hunt said: “With the existential vulnerability we face, now would be the wrong time to step back from our international climate responsibilities. So I can confirm that, despite the economic pressures, we remain fully committed to the historic Glasgow climate pact agreed at Cop26, including a 68% reduction in our own emissions by 2030.” The government is not currently on track to meet this target.
The autumn statement’s purpose was to find £55bn in tax rises and spending cuts to stabilise the UK economy. To put that in context, that’s about 18 days’ worth of the pure profit the global oil and gas industry has been banking for the past 50 years.
