George Osborne today delivered his sixth Budget as Chancellor and the last of the current parliament, with key announcements across sectors in the UK.
The Government will open negotiations on subsidies for the world’s first tidal lagoon power plant in Swansea Bay, South Wales to establish whether a Contract for Difference (CDF) is affordable and value for money for consumers.
The proposed six-mile horseshoe shaped sea wall scheme could generate renewable electricity for 155,000 homes for 120 years by harnessing tides. However, estimates show that subsidies for power from the lagoon would have to be around £168 per MWh – significantly more expensive than other low-carbon technologies.
Ed Davey, climate and energy secretary, said: “Britain has some of the best tidal resources in the world – tidal lagoons could provide 8 per cent of our electricity needs, replacing foreign fossil fuels with clean, reliable home-grown electricity and creating fantastic economic opportunities.”
The Chancellor also vowed to back heavy industries such as steel, aluminium, chemicals, paper, cement, glass and plastics. A compensation scheme to help energy-intensive companies is to be brought forward at a cost of £25m as industry groups have been pressing for help because of the cutbacks caused by high bills.
However, Gareth Stace, UK Steel director, said: “While today’s announcement on the early introduction of some compensation from energy costs for sectors like steel is a welcome statement of intent, we are disappointed the Chancellor did not go further.
“This deal will leave energy-intensive industries paying 80 per cent of the costs of the renewables support until April 2016.”
The Internet of Things (IoT) got a mention from Mr Osborne to the delight of those in the industry, saying: “this is the next stage of the information revolution, connecting up everything from urban transport to medical devices to household appliances”.
No further details were announced for how the Government is planning to invest in new technology, but in confirming greater government interest in the IoT, Mr Osborne made a joke at the expense of Labour leader Ed Miliband.
"So should - to use a completely ridiculous example - someone have two kitchens, they will be able to control both fridges from the same mobile phone," he said, in reference to the Labour leader.
Up to £600m will be spent however to clear new spectrum bands for auction to improve mobile networks in a bid to deliver ultra-fast broadband to all homes.
Oil and gas
There was much pre-Budget talk on whether there would be help for the North Sea oil industry and here it is. The Government announced a package to cut costs amounting to £1.3bn to combat the collapse in oil prices and save thousands of jobs across the industry.
Without this kind of encouragement, John McDonald, managing director of the oil and gas industry skills body (OPITO), said companies would not be able to retain the skills within the industry workforce as people would migrate to other, less volatile, sectors.
“This will ensure the industry continues to be a positive contributor and source of employment in the years ahead. We are pleased the UK Government has listened to the industry’s concerns,” he added.
The North Sea has been hammered by the plunging price of oil, with hundreds of job cuts announced in recent months and fears a drop in investment could lead to the accelerated decommissioning of oil fields.