Despite calls this week from responsible investment organisations to clarify the UK’s net-zero policies, chancellor Kwasi Kwarteng’s fiscal event today included little detail.
Addressing the House of Commons this morning, the UK chancellor (pictured) announced the expected energy price guarantee and energy bill relief scheme, and said the total cost of the government’s energy plan, although “uncertain”, would be around £60bn. But he did not address the UK’s plans to reach net zero by 2030.
The government’s Growth Plan 2022, published in conjunction with the fiscal event, says instead it has asked the Chris Skidmore MP to chair an independent review “into how to deliver our net-zero commitment while maximising economic growth and investment, supporting energy security, and minimising the costs borne by businesses and consumers”. This report is expected at the end of 2022.
The Plan also confirms UK prime minister’s recent energy announcement that the North Sea Transition Authority will shortly launch a new oil and gas licensing round, expected to deliver more than 100 new licenses, and the government has ended the pause on extracting shale reserves.
At the time, Rhys Schofield, managing director at Belper-based Peak Money, called the use of fracking a “sticking plaster”.
“We know renewables are now the cheapest source of energy so why on earth are we not taking some of the obscene profits from oil and gas production and going all in on building a sustainable future instead of still talking about fracking, which is no more than a short-term sticking plaster?” asked Schofield.
Today’s Growth Plan also said the government is set to increase renewables capacity by 15%, although it is yet to release details on how this is to be achieved.
Shadow chancellor Rachel Reeves criticised this lack of detail in today’s announcements, as well as commenting that the plans to pay for the energy price caps leave the “eyewatering windfall” of energy companies untouched. “The boardrooms of energy giants will be toasting the chancellor,” she said.