ECA welcomes Hunt’s energy resilience message, but says electricity taxes counterproductive

ECAtoday

ECA welcomes Hunt’s energy resilience message, but says electricity taxes counterproductive

Leading electrotechnical and engineering services body ECA says Chancellor Jeremy Hunt’s Autumn Budget offers some stability for business after recent economic turbulence and welcomes its focus on energy resilience.

Read ECA's headline overview of the Autumn Statement here.

The proposed reduction in the energy consumption of buildings, which provides an incentive to achieve the highest environmental standards, is a welcome move. But ECA calls for clarity on how this will be implemented. The trade body hopes its expertise in this field will ensure it plays a prominent role in the new task force.

Despite announcements of investment in offshore wind, carbon capture and nuclear, ECA remains concerned about the softening of the UK’s net zero global leadership. Measures such as taxation of electric vehicles, the 45 percent levy on electricity generators, and the April 2023 energy bill cap rise will dampen the appetite to invest in the green economy.

ECA Director of Workforce and Public Affairs Andrew Eldred said:

“We welcome Mr. Hunt’s highly anticipated budget and its aims to create fairer taxes and energy resilience.

“However, we are worried that clean electricity is still being taxed more heavily than fossil fuels. For the last few years, the UK has consistently generated around 40 percent of its electricity from renewable sources, and the government’s levy on electricity generators could stifle long-term investment in homegrown clean energy and energy security.

“Despite the economic turmoil of the past year, the UK remains a strong global leader in attracting renewable energy investment; we need to capitalise on this tailwind, rather than block it.”

ECA has welcomed the Chancellor’s commitment to upskilling, with a focus on skilled trades that will be vital to the competent installation, operation and maintenance of decarbonized infrastructure, transport, and energy efficiency.

With the skills shortage the primary concern for firms in the construction and built environment sector, ECA calls for additional government support for training to be developed in collaboration with employers.

Andrew Eldred added:

“The electrotechnical sector is an engine of the high skill, high wage and net zero economy the government wants to achieve. We are pleased to see that the Chancellor understands the need to focus more on workforce skills.

“If done properly, the electrotechnical industry can offer some of the most sought-after and future-proofed career paths, with plenty of prospects for growth and development.”

ECA criticised the announced tax on electric vehicles, saying this sends the wrong message to consumers looking to switch from ICE cars to EVs at a crucial point in our journey to net zero. In addition, a further energy bill cap rise in April 2023 could push even more households into fuel poverty, jeopardising their health and safety.