Zachary Leather

bloomberg.comUK Considers Cuts to Home Energy-Efficiency Plan to Fund DefenseThe UK is considering cuts to its flagship program to upgrade millions of homes, as it seeks more than £2 billion ($2.6 billion) in energy-department savings to help fund higher defense spending.

Strange move given that the WHP money is largely capital spend, not where the funding gap is biggest for defence. This won't help at all with the extra £6bn of day to day spending Gov needs to find to meet 3% of GDP, a gap which matters more for meeting fiscal rules

Jess Shankleman @jessshankleman.bsky.social

NEW: The UK is considering cuts to its £15bn Warm Homes Plan, just months after it was launched to upgrade millions of homes. CCS and hydrogen are also under scrutiny. With @oliviarudgard.bsky.social www.bloomberg.com/news/article...

resolutionfoundation.orgElectric dreams • Resolution FoundationA low carbon electricity system will underpin the UK’s journey to net zero, making the electricity we use today greener but also fuelling our cars and keeping us warm at home in decades to come. But t...

Great news from Burnham today - and h/t tip to @jonnymarshall.bsky.social and @emilyfry.bsky.social's 2024 paper calling for the very same

Jonny Marshall@jonnymarshall.bsky.social

A good move. Within a decade, the cost of financing new assets – not fuel costs – will be the main driver of electricity prices: by 2035, capital is set to make up over half of power system costs, up from 8 per cent in 2025

resolutionfoundation.orgSecond wind • Resolution FoundationNet zero is touted as a way to regenerate local economies and cushion industrial decline, as well as delivering cheap energy. Aberdeen and Grimsby show that it cannot do all three in every place that ...

⏰NEW REPORT⏰ published today on how the push to 'reindustrialise the north' with net zero (as Burnham puts it) is going in practice. We did a deep dive on how towns at the forefront of new net zero industries - Aberdeen and Grimsby - are faring. The answer is not as well as hoped.

But concentrated in a handful of places these jobs could make a huge difference - bringing productivity gains and living standards benefits fitting of proper reindustrialisation with it. We just need to accept that that means picking winners, and beefier industrial policy to make it happen

END THREAD much more in the paper here www.resolutionfoundation.org/publications...

The problem for both Aberdeen and Grimsby is that not enough strategic thought has been put into delivering on reindustrialisation promises. Neither have enough of their respective industries, which are dotted across the UK, and both are limited by foreseeable infrastructure challenges.

What we need to face up to is that there isn't enough industry to go around. We counted 18 places with 2.7m workers that have been made big net zero promises, but estimate that there's only enough permanent (and clustered!) direct jobs on offer to give them a 2-3% employment share. That's not much

The likely reason? Despite being fundamental to economic growth in the area, the electricity sector accounts for very few jobs, accounting for just a percentage point or two of the areas workforce. These are simply not labour intensive industries.

Success will have to mean looking beyond the small slice of the wind supply chain Grimsby has got - operations and maintenance - or getting in other sectors like CCS. That would mean building what we don't currently have: a proper net zero cluster that prioritises scale in one place.

And what about Grimsby? Wind really got going in the late 2010s - when wages in the town were a fifth below the UK average. Since then Grimsby has a hand in a third of all the UK's offshore wind, a carbon capture project and EV charging: a clean sweep of net zero industries operating in the area.

On the face of it things are going well - wages have shot up, after a difficult post crisis period. But other data looks murky - the min. wage workforce is one of UK's largest, jobs growth is tepid, inactivity up, and hours down. Not the sign of a place attracting great new full-time jobs.

But wind is struggling to fill the boots left by this declining oil industry. One key reason for that is capacity constraints - we didn't build the cables in time for Aberdeen to be the offshore wind centre it wants to be, so some Scottish wind farms are turned on as much as 70% of the time

With years before these constraints are resolved, and drilling more a dead-end, that leaves Aberdeen looking for a stop gap. Workers won't wait around for new jobs to arrive, and are already leaving in droves. Decomissioning is one such possibility - lots will be needed near Aberdeen.

In Aberdeen offshore wind doesn't seem to be slowing the decline caused by the oil industry's contraction, which started when the oil price declined in 2013.

Make no mistake, this decline isn't being caused by net zero - oil output has been falling for decades and the endless debates on licenses are a sideshow. The oil is just running out. Even if things did pick up, that's not a jobs story - we find employment and oil production are barely related.

These are the jobs Aberdeen and Grimsby hope to get. The former seeks to smooth the decline of its prosperous oil sector and stay Europe's energy capital. Grimsby is hoping its ports and north sea access spell economic revival after decades of economic malaise, since fishing jobs evaporated.

Both have done well on paper - Aberdeen and Grimsby are hotspots for offshore wind, the net zero industry that is furthest along in its development. But it's unclear how much economic revival net zero is actually helping these trailblazers.

@resolutionfoundation.org

The promises made of net zero are often talking about a particular type of industry, the kind that can bring new life to local economies. We can't reindustrialise with a few extra retrofitters here and there - but there are new industries that could cluster, like EVs, wind, or carbon capture.

Zachary Leather reposted

Resolution Foundation

Replying to @resolutionfoundation.org

And please read our new research published today alongside the event: Second wind: How can green industries contribute to local economic growth? by @jonnymarshall.bsky.social @zackleather.resolutionfoundation.org www.resolutionfoundation.org/publications...

The article says that cutting to 50% would see 5.8 million fewer electric cars sold. At £1k a year saved each that's £6 billion A YEAR added on to consumer bills by the time the full effects are felt. Huge money! About four times as much as the electricity VAT cut!

Zachary Leather@zackleather.resolutionfoundation.org

Much will be said about the impact of this on climate targets. It's certainly very difficult to see how we can meet our (legally binding) ambitions while removing a plank this big this late in the day. But it's bizarre this government wants to scrap a policy that will save consumers so much money

theguardian.comAndy Burnham moves to cut new EV sales targetsPossible cut from 80% down to as little as 50% could add millions of tonnes of CO2 to emissions and comes amid UK heatwaves Andy Burnham’s government has said it will look at cutting electric vehicle sales targets, in proposals that could add millions of tonnes a year to the UK’s future carbon dioxide emissions. The government launched a consultation on Friday on cutting the target for new EVs to as little as 50% of all new cars in 2030, down from 80% under existing rules. The consultation will include several options, including leaving the headline target unchanged, or cutting it to 70%, 60% or 50%. Continue reading...

The Guardian@theguardian.com

Andy Burnham moves to cut new EV sales targets

These aren't trivial sums we're talking about here - we estimated aggregate savings from cheaper transport could top £20 billion by 2035 - or £700 per household. Losing a chunk of that, or delaying how quickly those that don't buy new can access it, is not a good deal for the consumer.

It's additionally perplexing to see this sort of move during an oil crisis, which is only improving the case for going electric. It's long overdue that EVs are seen for what they are, a better technology that saves big money.

The Guardian@theguardian.com

Andy Burnham moves to cut new EV sales targets

You might say, well if EVs are so good why do we need a regulation to force people into buying them? But most (4 in 5) people aren't driving new cars, they buy used. The opportunities most of us - and lets be honest, the more price conscious of us - have to buy a used EV is fixed by how many buy new

So the people who lose out from easing off government pressure on the new EV market are the low and middle income households who could really do with an affordable EV that cuts their bills, but will have to make do with a pricey petrol one due to a constrained market.

The Guardian@theguardian.com

Andy Burnham moves to cut new EV sales targets

The basic truth is EVs are far cheaper than petrol cars. More than 60% of the savings from transitioning to net zero are from cheaper transport. Even with the incoming taxes on electric vehicle miles, most car owners still save hundreds of pounds a year.

This used to be only about fuel costs - but electric cars are soon going to be cheaper to buy as well! Autotrader already estimate that the average new electric car is cheaper than a petrol one, something CCC says wouldn't happen until next year.

Today Burnham announced the return of the £2 bus fare cap, a much loved policy of previous Governments that was raised to £3 by Reeves two years ago. But who will benefit? [THREAD]

Bus usage is still down 40% on twenty years ago and hasn’t yet recovered to pre-covid levels - with implications for how many buses can run and the costs for each passenger. Reversing this decline is the next challenge.

And a word on funding – voters will hope this is a permanent change, but the £454 million needed has only been found for this year. Keeping the policy in place is another spending headache for the Chancellor this Autumn.

Today Burnham announced the return of the £2 bus fare cap, a much loved policy of previous Governments that was raised to £3 by Reeves two years ago. But who will benefit? [THREAD]

There are other things Burnham could do to keep buses cheap – rail services have a plethora of (poorly) targeted discounts, which affect a far larger portion of passengers than the bus equivalents. Extending these would be a sensible next step

So this is a good start but it’s important not to forget the bigger picture – buses are already a pretty cheap way to get around. Improving their quality and quantity is just as (if not more) important a way to ensure struggling families can get where they need to go.

Today Burnham announced the return of the £2 bus fare cap, a much loved policy of previous Governments that was raised to £3 by Reeves two years ago. But who will benefit? [THREAD]

It’s good that Burnham has focused on buses rather than trains for his first intervention – buses are the favoured public transport of the poorest households most likely to be struggling with the cost of living, and particularly important for those without a car

Reducing the cap won’t do much to help most bus passengers – just a fifth of bus journeys cost over £2 – but the passengers it will help are disproportionately lower income

Today Burnham announced the return of the £2 bus fare cap, a much loved policy of previous Governments that was raised to £3 by Reeves two years ago. But who will benefit? [THREAD]

@jonnymarshall.bsky.social

Burnham’s instincts to turn to transport first are on the pulse of public opinion, the public service that people across the country seem most dissatisfied with

Zachary Leather reposted

Jonny Marshall

21 July

The Government has today announced that VAT on electricity bills will be cut from 5% to 0% from October, saving the typical household around £45 a year 1/

gov.ukThe Defence Investment PlanEquipping our forces, defending our future.

Do the dizzying array of big numbers in the new Defence Investment Plan stack up? Unfortunately this isn’t a simple question 🧵 www.gov.uk/government/p...

And what about our 5% of GDP by 2035 target? There’s lots of ways of calculating this – but looking just at what’s changed, £3 billion extra funding in 2029-30 is only equivalent to an extra 0.1 per cent of GDP compared to what was announced last year.

So it’s hard to say whether this truly does put us on course for 4.2 per cent of GDP by 2035, as Starmer says, but today’s funding announcements certainly aren’t a big part of that journey.

gov.ukThe Defence Investment PlanEquipping our forces, defending our future.

Do the dizzying array of big numbers in the new Defence Investment Plan stack up? Unfortunately this isn’t a simple question 🧵 www.gov.uk/government/p...

The other mystery is how it’s funded. Most of it is shaving money off capital budgets, with £4bn skimmed from aggregate CDEL and £3bn extra from DESNZ/ DfT. That will hit DESNZ most (to tune of £2 billion), with details pushed back to Autumn.

Why did Starmer not just shave a bit more off CDEL? Probably because there’s £7bn of new resource spend to find as well as more capital – so CDEL cuts (which don’t score) can’t satisfy the fiscal rules. New taxes, borrowing or spending cuts will be needed instead.

gov.ukThe Defence Investment PlanEquipping our forces, defending our future.

Do the dizzying array of big numbers in the new Defence Investment Plan stack up? Unfortunately this isn’t a simple question 🧵 www.gov.uk/government/p...

First thing that’s confusing here is how to arrive at that £15 billion. That’s not all cash – in fact only £11.6 billion is extra money (the SR package was about £286 billion for the same period). The rest is made up by increasing “MoD spending power”

That means some things which most of us would find hard to think of as extra spend – like rationalizing the MoD estate or reallocating spending internally. But more substantially HMT has agreed to take on £2.4 billion worth of funding for Ukraine.

gov.ukThe Defence Investment PlanEquipping our forces, defending our future.

Do the dizzying array of big numbers in the new Defence Investment Plan stack up? Unfortunately this isn’t a simple question 🧵 www.gov.uk/government/p...

The PM announced £15 billion extra funding compared to the last Spending Review (SR), delivered over next four years (ie to 2029-30). The plan graciously includes a breakdown of the new settlements, totalling £298 billion.

It's undersold how important the ZEV mandate is for consumers, so big disappointment to see target for 2030 go down to 50% from 80% - a massive reduction. This will see British drivers paying more for their cars, both to run and to buy.

And the implications for carbon policy won't be costless. Ultimately electric cars are the biggest and the cheapest plank to the government's plan to meet carbon budgets in near future. Unless Gov wants to ditch our legally binding targets, weakening the ZEV will add costs to meeting net zero

This is being done in name of protecting our petrol car industry, a valid goal for a big employer. But there are costs too of slowing UK's move into growing markets and doubling on hybrid vehicles, whose long term role is less certain. Regardless, British consumers are unlikely to be the winners

plc.autotrader.co.ukNew electric cars now cheaper than petrol on average for the first time says Autotrader

Fewer EVs is bad news because they're lot cheaper to run, a fact that was set to save UK drivers £22b on fuel bills by 2035 - and, if autotrader are to be believed, now cheaper to buy. Yes discounts and Chinese imports are driving this as well as falling costs - but consumer will still lose out!