Recommendation 1

HM Government Not Addressed

The government agrees with the Committee’s recommendation. Recommendation implemented Departmental budgets are set at Spending Reviews to enable Ministers to consider the value for money of spending proposals across government priorities and within fiscal constraints, to ensure total spending is affordable. The government recognises the importance of long-term policy and funding certainty for net zero, particularly to mobilise private investment into the transition. The government’s plans for all sectors of the economy are set out in Powering Up Britain, and government has provided targeted longer-term funding certainty to several priorities for net zero, including: • Autumn Statement 2022 announced £6 billion of new government funding for energy efficiency, which will be made available from 2025 to 2028, in addition to £6.6 billion allocated this Parliament. • Spring Budget 2023 confirmed up to £20 billion in long-term support for the early deployment of Carbon Capture, Usage and Storage (CCUS). • At Autumn statement 2023, the government announced a £960 million Green Industries Growth Accelerator. This will support investments in manufacturing capabilities for the clean energy sectors where the UK can gain the clearest strengths: CCUS, hydrogen, offshore wind, electricity networks and nuclear. On research and innovation (R&I), the government has committed £4.2 billion of funding support in the current Spending Review period (2022-2025), including the flagship £1 billion Net Zero Innovation Portfolio. More broadly, the government has steadily increased funding for R&I since 2016 and is committed to spending £20 billion per annum by 2024-25. The Prime Minister also recently announced an additional £150 million of long-term funding for the Green Future Fellowship, which will fund scientists and engineers to develop practical, breakthrough green technologies and climate change solutions. In addition, government uses a range of policy levers to provide long term support, including the Contracts for Difference scheme for low-carbon electricity generation, through which generators have received almost £6 billion net in price support to date. Further, the government passed the Nuclear Energy (Financing) Act 2022, which enables new nuclear projects to benefit from a Regulated Asset Base model, reducing the cost of new build nuclear and providing certainty to private finance. The government agrees with the Committee’s recommendation. Recommendation implemented As the Prime Minister set out, the transition to net zero must be pragmatic, proportionate and credible, while taking into account that some measures under previous plans would have imposed significant upfront costs on families. For example, delaying the Electric Vehicle phase out date will allow consumers to choose the vehicle that best suits their budget, whether that means opting for an Electric Vehicle now or waiting to take advantage of falling prices over the coming decade. The Zero Emission Vehicle mandate for the next seven years will require manufacturers to sell an increasing share of zero emission vehicles each year and help charge-point and car manufacturers develop their business plans and develop supply chains. The government will also be introducing an exemption to the fossil fuel boiler phase out so that those households who cannot make the switch no longer need to. At the same time, the grants available for heat pumps have increased to £7,500, providing additional support to families to upgrade their heating systems. This, alongside policies such as the Clean Heat Market Mechanism, will grow the market, reducing prices in the long term. The Climate Change Committee published analysis in October on the impact of these recent announcements, and from their 2023 Annual Progress Report, they have increased confidence in the UK meeting the forth Carbon Budget. Through the Net Zero Strategy and Powering Up Britain, government has published two detailed plans setting out unprecedented levels of detail on the UK’s plans to reach net zero. Each year the Department for Energy Security and Net Zero (DESNZ) publish updated forecasts of future emission projections and will continue to do so.