Rachel Reeves must do more to be a green Chancellor

Last week’s Budget was a step in the right direction in the fight against climate change, says Midlands energy expert Ron Fox. “But Rachel Reeves needs to do more towards her one-time ambition of being the first green chancellor,” added Ron, of Noreus Ltd on the University of Keele Science Innovation Park.

Transport: He disagreed with the decision to continue to freeze fuel duty until 2025 and keep the 5p tax cut made by the Conservatives in 2022. It is estimated to have raised UK greenhouse gas emissions by 7 per cent since 2010 which sent the wrong signal while at the same time raising the bus fare cap from £2 to £3 and rail fares by 4.6 per cent. But Ron did agree this was balanced out a little by higher taxes on air passengers, increasing by up to £2 for an economy short-haul ticket and £450 per passenger for a private jet trip.

Electric vehicles: Some tax breaks on electric vehicles will be maintained. But the rate of company car tax for electric vehicles, based on the value and type of car plus its CO2 emissions will rise from 2 per cent to 9 per cent by 2029-30. The gap in vehicle excise duty, the road tax, between electric and regular vehicles will also increase. “We need to move to a transport system which makes the greenest ways of getting around the cheapest and most convenient,” added Ron.

Renewable energy: The Department for Energy Security and Net Zero was given a 35 per cent capital boost under a new investment rule that will allow money to be used for renewable energy projects to help to make the UK a clean energy superpower.

Homes: More than £1bn was announced next year for the warm home discount scheme, which is a one-off £150 discount on a low earner’s electricity bill. There was also a guarantee of investment of an initial £3.4bn towards heat decarbonisation and household energy efficiency between 2025-26 and 2027-28. But Ron did point out this was only half of what Labour promised in its manifesto.

Farming and flood defences: The budget also confirmed that the government is facing significant funding pressures on its almost £600 million flood defence and farm schemes in 2024-25. The Chancellor said that while the Labour government is meeting those commitments this year, it is necessary for the Department for Environment, Food & Rural Affairs (Defra) to review and possibly cut these flooding and nature friendly farming schemes from 2025-26 to ensure they are affordable.

“This seems a short-sighted scheme because cuts to flood defences will cost more in the long term if people lose their homes and businesses,” said Ron. “Also, it will be impossible to meet nature targets without paying farmers to restore their land for nature and restoring wildlife is vital to lowering our carbon emissions. On top of that there is still the problem of sewage being pumped into our rivers and seas.”

Oil and gas industry: The budget also confirmed a decarbonisation allowance to encourage the oil and gas sector to invest in cleaner, lower-emission technologies, which will be set at 66 per cent. But the 29 per cent investment allowance will be removed until 2030.

“This budget was a start,” said Ron, “but the only way to bring down energy bills permanently is through investment in insulation, home improvements, renewables and infrastructure which will free people from volatile gas prices for ever. So, more work is needed from the Chancellor in the next budget.”

For more advice on winter warmth and cutting fuel bills call Ron on 0845 474 6641.

Caption: Sending the wrong signal – Freezing fuel duty on cars while raising bus and rail fares was not a good green move, said Ron.