BEAMA Budget Reactive Commentary

Yselkla Farmer, CEO of BEAMA, the trade body for manufacturers of electrical equipment, comments on Rachel Reeves' budget measures:

We welcome the Government’s focus upon driving down energy bills for UK households, but further measures are needed to ensure that we are creating a sustainable energy system by supporting investment from consumers and businesses with credible, delivery-focused policies that bring the public along with us.

With much still to do to achieve Clean Power by 2030 and a need to accelerate progress towards the Net Zero 2050 requirement, now is not the time to introduce uncertainty. The scrapping of the Energy Company Obligation and other domestic electricity levies will deliver immediate savings to energy bills. However, without a clear policy on how this essential funding will be replaced within the twice-delayed Warm Homes Plan, the Budget has added further policy confusion as we work towards Clean Power 2030.

Manufacturers need policy consistency over time and tangible delivery plans to encourage investment, and Government should understand this investment cannot appear overnight. Businesses also continue to struggle with energy and hiring costs which have not been materially improved by today’s Budget.

Our members enthusiastically welcomed the action plans for Clean Power, Industrial Strategy and Green Jobs, demonstrating the positive sentiment that Government can set. But manufacturers quickly need a clear and consistent policy to ensure short term relief is followed by long term improvements that will bring benefits to consumers for decades to come.

Energy bills and investment

Our members have consistently supported policies to reduce electricity costs as a top priority to help consumers and encourage investment in energy saving technologies. As such the bill savings announced in today’s Budget are welcome a short-term measure.

However, while the Government has announced an additional £1.5bn capital spending to the Warm Homes Plan pot, industry will want to receive clarity as soon as possible on how this will be raised and spent following the scrappage of the Energy Company Obligation (ECO).

Uncertainty remains over the publication of the delayed Warm Homes Plan, Future Homes Standard, and longer term structural changes to electricity prices. These policies are a great opportunity to stimulate consumer and business investment, economic growth, and accelerated decarbonisation.

We will be supporting the Government to accelerate policy development and decisions to boost industry confidence and press ahead with developing an energy system fit for the present and future.

Electric vehicles

The Chancellor’s proposal to introduce a 3p per mile electric vehicle excise duty (VED) risks sends the wrong signal at a crucial time for the UK’s transport transition.

While it is inevitable that electric vehicle drivers will eventually need to contribute more to make up for the reduced fuel duty revenue from ICE vehicles, now is not the right time to discourage EV ownership. While only 5% of UK vehicles are electric according to the SMMT, the UK has a long way to go to reach its 2035 EV adoption target.

Similar schemes have reduced EV demand, undercutting the business case for continued investment in charging infrastructure rollout.

Using revenue raised from VED to fund road repairs caused by other vehicles sends the wrong message, supporting misinformation and incorrect claims that EVs are damaging UK roads.

Meanwhile the positive announcement regarding a reduction in domestic energy bills will further increase the disparity between those who can charge at home and those who rely solely on the public charging network. BEAMA will urgently be making the case for a more balanced approach within the upcoming EV charging price review.

 

Notes for editors

  1. BEAMA is the UK manufacturing trade association for the electrotechnical sector, providing leadership, expertise and independent influence in the areas of product safety, performance, energy efficiency, digital and sustainability. Our activities span a broad spectrum of technology groups, from energy networks through to electrical infrastructure and service technologies in the built environment.
  2. BEAMA tracks our members’ sentiments on a range of factors in our quarterly Market Pulse series. Our latest version will be published next week.  
  3. Electrical Product Manufacturing currently employs around 90,000 people in the UK, with a turnover of around £14bn.

 

Contact details:

Policy inquiries:

Simon Harpin, Head of Policy, [email protected]

Media inquiries:

Charlie May, Head of Marketing, [email protected]