Industry responds to the Autumn Statement announcement
On Thursday 17th November, the Chancellor announced his Autumn Statement, aiming to restore stability to the economy, protect high-quality public services and build long-term prosperity for the UK.
During his speech, the Chancellor unveiled a plan for stability, growth, and public services. Some of these plans include:
- A package of targeted support worth £26 billion, which includes continued support for rising energy bills
- The National Living Wage will be increased by 9.7% to £10.42 an hour, giving a full-time worker a pay rise of over £1,600 a year
- A £13.6 billion package of support for business rates payers in England
- Tax rises of £25 billion by 2027-28
- Sizewell C nuclear plant will go ahead, with the EDF contract to be signed at the end of the month, providing reliable, low-carbon power to the equivalent of six million homes for over 50 years
- Commitment to transformative growth plans for railways including High Speed 2 to Manchester, the Northern Powerhouse Rail core network, and East West Rail, along with gigabit broadband rollout
- Plans for the second round of the Levelling Up Fund were confirmed, with at least £1.7 billion to be allocated to priority local infrastructure projects around the UK before the end of the year
The Chancellor of the Exchequer Jeremy Hunt said: “There is a global energy crisis, a global inflation crisis and a global economic crisis. But today with this plan for stability, growth, and public services, we will face into the storm. We do so today with British resilience and British compassion.
“Because of the difficult decisions we take in our plan, we strengthen our public finances, bring down inflation and protect jobs.”
The industry has responded to the Chancellor’s announcement with some positivity but also apprehension.
Hilary Leevers, Chief Executive at Engineering UK, comments: “We need a well-funded education, skills, and careers system to ensure that we have enough engineers, scientists, and technicians to achieve the government’s ambitions for net zero and energy independence as confirmed in [the] statement – along with ‘superpower’ status in science and innovation.
“We cautiously welcome the announcement on education spending made. The Autumn Statement suggests that the government understands the financial pressures that the education sector is experiencing. Only by investing in the future of young people will we be able to tackle the chronic and increasingly acute skills shortages across the economy, and in particular in the engineering and technology sector, that are threatening companies’ ability to grow.
“We look forward to working with Sir Michael Barber on the implementation of the government’s skills reforms. The engineering and technology sector is crying out for more skilled people and to ensure this we need T Levels to be a success and falling apprenticeships numbers to be addressed. We would welcome a broader look at the education system and hope government will work with stakeholders to develop a STEM skills strategy and identify any further reforms needed to ensure that we have an education system able to deliver on the UK’s ambitions.”
Russel Haworth, CEO, NBS a construction technology platform, and CEO, Byggfakta Group has said: “Connectivity drives growth, and thus this budget has some good news for the North East. The investment in infrastructure, including the Northern Powerhouse Rail, better local broadband, and future devolution, giving us more of a political voice, look set to boost the area.
“Energy efficiency was mentioned, but little detail was given. A sensible move, which seems overlooked, would have been to zero rate VAT on energy-efficient refurbishments and associated technologies, which support the evolution from fossil fuels. Tax breaks for green innovation would also be transformative, helping drive growth and increase productivity.
“Construction is responsible for a quarter of UK emissions, and support for the sector to move away from traditional processes and materials would have increased the country’s resilience and drive growth. Furthermore, the Treasury has identified embodied carbon has the most potential to be removed at the design and planning stages. Why isn’t changing construction methods on the agenda? This looks like another missed opportunity.
“While the focus on technical skills and education is a long-term investment in growth, there’s a risk that if the construction sector contracts too much, there won’t be the opportunities available. While the Chancellor did mention careers advice being key in getting Britain working, our recent study found that half of young people were interested in a construction career, yet one in three had inadequate, dated careers guidance about the sector.”
Stuart Murphy, Inventor and Founder of tidal range energy pilot, TPGen24 said: “The Chancellor shared plans to temporarily increase the energy profit levy from 25% to 35% and implement a temporary 45% levy on electricity generators. While this is good news, disappointingly, he then went on to only mention a focus on offshore wind, carbon capture and nuclear, giving Sizewell C the green light.
“This means our current energy policy remains narrow, with a strategy overly dependent on intermittent renewables and far-off promises, propped up by fossil fuels to meet base load needs.
“Also, the £14bn from levies isn’t going to scratch the surface of the issues at hand.
“Ultimately, we need further investment into diverse, long-term renewable power strategies like tidal range energy. Water is nature’s battery and remains woefully untapped in its potential to provide 24/7 green Base Load energy directly to the grid, all while revitalising many coastal regions and bringing real terms growth and prosperity to the people who need it most.”
Mike Foster, CEO of the Energy and Utilities Alliance (EUA), said: “The Chancellor confirming the energy price cap will see a whopping increase up to £3,000 in April will inevitably worry millions of hard-pressed families. Our recent consumer survey found 78% of Brits support keeping the price cap on energy bills in place, so an increase that plunges millions into fuel poverty is not what any households wanted to see.
“This is particularly immoral while the Government’s own Boiler Upgrade Scheme, that is still in place, hands out £5000 subsidies to the well-off to change their heating, while millions struggle to pay their bills. They have missed an open goal to solving some of the energy bills turmoil plaguing the British public. Redistributing these millions of pounds in pointless heat pump subsidies into insulation, efficiency measures, and bills support is really a no brainer.
“With news of renewed investment in nuclear, this budget also reinforces our view that longer-term we need to move away from fossil gas and switch our network over to hydrogen. Not only will this help to reduce emissions – which the Chancellor pointed out was a priority in his speech – this level of energy independence would also free us from the global gas markets that Putin’s war has significantly impacted.”
Rahul Kejriwal, CEO of Bricsys, said: “Five years ago, the 2017 Made Smarter Review promised investment in industrial design technology (IDT) would boost productivity, add £455 billion GVA, reduce CO2 emissions by 4.5% and create 175,000 new jobs over a decade. Investments in open source, flexible technologies could have been the saving grace for the construction industry – but the impact of this review has not been felt and it’s unlikely the budget will do anything to advance or protect the construction and manufacturing businesses, which together make up 16% of the UK’s GVA.
“Where the Government doesn’t do enough, the onus falls on businesses to navigate a brutal market. Design for manufacturing and assembly (DfMA), or Industrialised Construction, is the best route to both profit and sustainability. DfMA methods are 50% faster and more environmentally friendly than traditional building projects and require fewer expert skills to execute – a crucial point in the face of razor thin margins, an imminent recession and a talent and technology shortage.”
David Lloyd, General Manager of Connected Energy Performance at Johnson Controls UK&I, said: "Jeremy Hunt announced a new national ambition to reduce energy consumption from buildings and industry by 15% by 2030, a clear sign that we need to take more action, and soon.
"If we want to reduce energy consumption by 15% by 2030, businesses must consider implementing energy efficient plant/technology to drive real insights and introduce AI/ML driven control their energy efficiency. Heat pumps and lighting coupled with renewable energy and green supply will accelerate us past these commitments if we all act quickly to reduce energy intensity and secure our energy supply for the long term. Without smart tech, businesses can't hope to start their journey to make the impactful changes they need to for themselves, the environment, and health of their teams. Legacy infrastructure, lack of interactive control and gas heating within buildings will be a huge barrier to reaching the government’s net zero goals by 2030.
"It relies on the government, business leaders, and individuals like us to make the buildings we inhabit much more efficient. With millions of us facing fresh energy pain and climate change pressures mounting, there’s never been a better incentive to take action and today’s budget highlights the need to take action now."
Full details of the Autumn Statement can be found here.