Green economy reacts to UK Autumn Statement

The UK Chancellor Jeremy Hunt’s Autumn Statement has prompted varied reactions from the green economy. While there are some positive steps noted, the general consensus is that the 110-point plan falls short of what is needed for a comprehensive green transformation. This analysis is particularly relevant for asset managers who are increasingly focusing on sustainable investments and the opportunities presented by a net zero economy.

The government included measures such as £4.5 billion in investment for UK manufacturing from 2025 to 2030, with £960 million earmarked for new ‘green industry’ businesses (through the Green Industries Growth Accelerator – or GIGA – fund). This investment is expected to attract around £2 billion of additional investment annually over the next decade.

Also announced was more than a £2bn contribution to the automotive sector to support the manufacturing and development of zero emission vehicles, their batteries and supply chain.

Additionally, the statement confirmed the decision to make ‘full expensing’ permanent, allowing businesses to immediately deduct expenses on new IT, machinery, or equipment, and reforms to reduce clean energy businesses’ electricity grid access time.

Responses from green groups and experts

Professor Piers Forster, chair of the Climate Change Committee, appreciated the direction set by the statement towards tackling some barriers in the net zero transition. He highlighted the acceleration of the transmission network building, faster grid connections, and proposed planning changes for heat pumps and electric vehicle infrastructure as positive steps.

However, Rebecca Newsom, Greenpeace’s head of politics, criticised the statement for its lack of bold leadership and vision for a green industrial strategy. She remarked that the small reforms in the statement would not address the scale of economic and climate challenges faced by the UK. She also noted that other global powers, such as the US, EU, and China, are far ahead in supporting investment in green technology, leaving investors ‘shaken’ by the UK government’s recent inconsistencies on net zero commitments.

James Alexander, chief executive of the UK Sustainable Investment and Finance Association, welcomed the chancellor’s plans to speed up grid connectivity and reform planning for renewable energy projects. However, he noted that the size and scale of commitments made still fall short of a comprehensive response compared to initiatives like the US Inflation Reduction Act and the EU’s Green Deal Industrial Plan. Alexander emphasised the need for the UK to build investor confidence and address greenwashing risks to attract the necessary capital for a sustainable future.

Tanya Steele, chief executive at WWF, expressed disappointment with the chancellor’s approach, stating that the UK is falling behind in the race to seize the growth opportunity of the 21st century. She criticised the chancellor for squandering an opportunity to respond ambitiously to international initiatives like the US Inflation Reduction Act and the EU’s Green Deal.

Implications for asset managers

For asset managers, these reactions and the perceived inadequacies in the UK’s Autumn Statement highlight the importance of understanding the broader policy landscape and its impact on green investments. The need for a more ambitious and comprehensive green strategy is clear, and asset managers should be cognisant of how these policy decisions could affect their green investment portfolios and strategies.

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