rishi sunak budget

Budget 2021: all the engineering and technology announcements

Image credit: reuters

Chancellor Rishi Sunak has set forth a “green growth” budget for 2021 including measures to finance a £12bn Infrastructure Bank alongside £15bn of new green gilts this year.

The Infrastructure Bank, which will be located in Leeds, will be furnished with £12bn in initial capitalisation with the hope that it will support £40bn in total infrastructure investment.

The new lender will have a remit to help deliver the UK’s commitment to reach “net zero carbon” by 2050 and provide funding for projects across the UK.

Sunak also announced two UK-wide competitions, one with £20m in funding to develop floating offshore wind demonstrators and £68m for long-duration energy storage technology.

But the environment was not a core focus of Sunak’s speech and he also announced a further freeze on fuel duty – for the eleventh year running – and made no mention of the “green homes grant” scheme designed to help homeowners make their homes more energy-efficient.

Aside from the environment, the contactless payments limit has been increased to £100 from £45. Cash payments decreased drastically during the Covid-19 pandemic.

The Treasury said that while legally in force from today, the changes to payment limits will not happen in practice immediately, as firms will need to make the necessary systems changes.

Alongside the Budget, the government published its 'Build Back Better' plan for growth, which will be based on the three "core pillars" of infrastructure, skills and innovation.

Responding to the Budget speech, leader of the opposition Sir Keir Starmer said: “The biggest challenge for this country is the climate emergency.

“The Chancellor talks up his green credentials but his Budget stops way short of what is needed or what is happening in other countries.

“This Budget should have included a major green stimulus, bringing forward billions of pounds of investment to create new jobs and new green infrastructure.”

He then criticised the plans to approve the construction of a new coal mine despite warnings that the coking coal it produces may not be usable in UK steelworks.

“If anything sums up this government’s commitment to a green recovery and jobs for the future it’s building a coal mine we can’t even use,” he said.

In a response from the engineering profession, Sir Jim McDonald, president of the Royal Academy of Engineering, said: “Today’s Budget, including the publication of Build Back Better: our plan for growth, provides welcome recognition of the potential of the UK’s high-growth, innovative technology companies alongside the importance of additional government investment in the green industrial revolution.

"We welcome the emphasis on ensuring that the UK is internationally competitive, encouraging business investment and ensuring that international innovators working across universities, start-ups, and innovative businesses, can readily bring their skills and expertise to the UK.

“However, our ambitions on net zero, infrastructure and digitalisation are threatened if we do not have the number and diversity of people with engineering and technical skills needed to deliver them."

Rebecca Newsom, head of politics for Greenpeace UK, said: “For all the talk of a green recovery, this Budget suggests the Chancellor has failed to clock the urgency of the climate emergency.

“A National Infrastructure Bank and Green Bonds could be steps forward, but without a guarantee they will provide sustained investment to decarbonise buildings, transport and industry, they are unlikely to do much to advance climate action.

“Meanwhile the government’s shambolic handling of the Green Homes Grant and ambitions for the City on ‘high quality’ offsetting are both steps in the opposite direction, leaving the UK with weakened authority on the world stage ahead of November’s climate conference.”

Alan Laing, managing director for UK & Ireland at IFS, said: The Chancellor has recognised the need to do more to realise our net zero ambitions and promote investment in cleaner energy and the circular economy – however, measures in this area fall far short of those needed to bring about the kind of change needed to hit our current sustainability targets.

Stephen Phipson, Make UK CEO, said: “Given the difficult circumstances facing the Chancellor, industry will welcome the certainty and clarity he has provided about the route forward.

“This statement pursues a positive and fair middle road which balances the short-term need to avoid squeezing the recovery before it has started, whilst avoiding any artificial boost given the inevitable strong bounceback once the economy begins to open up.

“In particular Industry will welcome the extension of the furlough scheme and a clear recognition that we urgently need an investment-led recovery. The promise to consult on further changes to R&D is also welcome and Government must now move urgently to implement this so further policies to boost levels can be brought forward.

“We must now seize the opportunity provided by new technologies and the drive towards net zero to set out a longer term vision for the economy.

Reacting to Chancellor Rishi Sunak announcing measures for green growth in today’s Budget, Chris Jackson, CEO of Protium, the green hydrogen energy services provider, said:

“Protium is disappointed to see that the Government has not reflected on the advice from industry, including groups like the UK Hydrogen & Fuel Cell Association, to use this year’s Budget to put the UK green hydrogen economy on a solid foundation for growth.

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