“While there was a resounding statement about being “unshakably committed to net zero”, the measures taken indicate a hollowing out of that commitment under the pressure to prepare for war.”
By Paul Atkin
John Healey’s first budget nudged and nurdled but certainly didn’t challenge 45 years of neoliberalism and chart the “new course” that Andy Burnham hinted at in September.
And, while there was a resounding statement about being “unshakably committed to net zero” the measures taken indicate a hollowing out of that commitment under the pressure to prepare for war.
In particular, it showed a willingness to bend the knee to Trump’s demands on the North Sea, with headlines announcing that Healey will veto new offshore wind projects “if they will not lower bills” at the same time as Treasury tax calculations factored in income from the development of Rosebank. As there are about half a dozen other fields waiting in the wings for this decision, this looks like an attempt to defy geology, economics and safety to appease the White House and its local attack dogs.
In the rest of the budget that was clear from what was not said as much as what was.
To end the upward pressure on energy prices, we need to end the war on Iran
The fact that the increases in energy bills that have already had a big impact on the cost of living – and are hovering over the future like a pyro-cumulonimbus cloud – have been caused by the US/Israeli attack on Iran was acknowledged. But this was taken as a given. Just one of those things that happens. Least of all, was there any commitment by the UK government to oppose it, or step back from complicity in it; and “defensive” attacks on Iran will still be launched from Diego Garcia.
As a result of the war, fossil fuel companies are making colossal windfall profits. Shell’s have nearly doubled, and BP’s have quadrupled. This enables them to invest in more marginal oil and gas extraction, because the increased prices everyone is paying for them makes that potentially profitable, though a sign that the industry doubts its own future is that it is not rushing to do that. Increased emissions if they do. Increased damage. The banks that finance them -and arms companies – are also quids in from this war. A 100% tax on war profiteering would act as a disincentive to all this while raising billions to invest in the transition. Silence on that. Free pass.
Breaking with neoliberalism requires putting social needs above profitability. The chancellor appears to be as relaxed about these companies getting ”filthy rich” from war profiteering as Peter Mandelson was; and he’s not proposing to increase their taxation even though there is majority support for it.
The proposed Energy Wealth Fund from current rates of taxation on Fossil Fuels is a gesture in this direction so minimal as to constitute deflection more than commitment.
Clean energy is the solution
The recognition by the Chancellor that the renewable energy already installed in the UK has massively cut the impact of fossil fuel price rises is vital – especially in the face of the Fossil Opposition in Reform and the Conservative Party – who argue (with a straight face) that an 83% increase in wholesale gas prices since this time last year means that we need to use more of it to bring bills down – and that investing much, much more in the most expensive possible source of electricity generation – nuclear power – will do the same.
In 2020 gas set the price for electricity 90% of the time. It is now much more expensive, but sets it for just 60% of the time, and it’s coming down. That cuts bills. The chancellor’s stated ambition to “break the grip of gas on bills” is vital. But how far do the measures in his budget rise to that challenge?
The decision to hold back on new renewable capacity that cannot easily be connected to the grid requires prioritising investment into grid upgrades to open up bottlenecks like the one between Scotland and England, which causes frustrating curtailment costs and unnecessary gas backup use. Without that investment, all this will do is slow up the growth of renewable capacity.
Approving Jackdaw, Rosebank and, by implication, the other fields that are queuing up for approval, the government will lock us into expensive fossil fuel dependence, and the planet-wrecking emissions that go with them, and the costs of that, for longer than we need to. The phrase that we will “rely on oil and gas for decades to come” is designed to fudge the key question of how much; and avert the obvious point that the less we have to use the better it will be.
Bombs not Jobs
While the forced march of military expenditure increases is now being set at a slower pace than he was arguing for when he resigned as Defence Minister in the Summer – a 3.5% increase projected for 2035, not the 5% he saw as an imperative then – nevertheless, he’s still undermining security through climate action by diverting funds to war. And there remains the risk that the 10-year plan spending review will seek to step up the pace again. Meanwhile:
- £1 billion will be cut from the Warm Homes Fund “to help cover a shortfall in defence expenditure”. The WHF is set to provide loans of between £7500 and £35,000 for households to install solar panels, heat pumps and batteries; initially with £15 billion in funding and aiming to support 5 million households. Leaving aside GJA’s longstanding critique of this market-led subsidy approach – which benefits those who can afford it, leads to work being done in penny packets by small firms which are not always competent or even honest, misses out on economies of scale and thereby gets a smaller bang for a buck – this cut will lead to over 330,000 households missing out. There’s also a threat that a further £4.7 billion will be “reallocated” from this scheme to pay for the “Your First Home” scheme. That would cut a further 1.5 million households from benefiting from this. Higher bills, Higher emissions. A lower level of economic activity doing this work, so fewer jobs.
- The heat pump grant via the Boiler Upgrade Scheme will be cut by £800, leading to 100,000 fewer installations in the next 3 years. Again. Higher bills. Higher emissions, A lower level of economic activity. Fewer jobs.
Wider aspects of the transition are also being undermined.
- The continuing freeze on the fuel duty escalator will cost £4.3 billion by 2030. This continuing Fossil subsidy is presented as providing a relief for drivers but as Social Market Foundation Chief economist Gideon Salutin points out: “it does not work. Many savings are gobbled up by fuel retailers, who keep the price level and pocket the difference. Most of what’s left is taken by rich motorists who tend to drive more and own less fuel-efficient cars. Previous freezes have seen the richest tenth of earners save three times as much as the poorest tenth…. If government really wants to help hard-up drivers, it would support them into an EV, which are cheaper to operate than petrol cars, and support affordable transport services like buses and rail.”
- The welcome but minimal £100 million to cut the cost of public EV charging is 1/43rd of the fuel duty freeze cost. Charging 20% VAT on workplace charging will also slow the shift to EVs.
- There is to be no extension of the 0% VAT rating on “energy saving materials” including solar panels from next April – increasing costs, slowing the transition, increasing emissions, depressing jobs.
- At the same time, 10,000 “energy hungry” companies will get a 20-25% discount from next April, with back payments to cover this year coming with no conditional requirement to reduce energy or provide renewable on-site supply.
- Data Centres difficult to connect to the grid that are considered “exceptionally strategic projects” will be allowed to generate their own power with gas or diesel generators even though the experience of the United States is that the surge in construction of gas-fired power plants to run AI data centres is “set to undo 15 years’ worth of greenhouse gas reductions from US electricity generation”.
- New planning powers will also be used to accelerate Data Centre grid connections, which begs the question: over what?
- Exempting brownfield development sites of <1.5 hectares from biodiversity net gain regulations is a bit like Donald Trump paving over the White House Rose Garden; but doing it again and again and again, all over the country.
Social Justice Measures?
- The £100 Council Tax rebate for households in bands A-D will do little to dent the impact of the sharp rise in the energy price cap, which is projected to be £470 above current levels by the middle of next year. This is in a context of household energy debt projected to total £7 billion by the end of the year.
- The VAT relief on electricity bills worth £45 a year is already in place, so won’t dent this any further.
- The cut in the gas standard charge is a small but progressive measure that will benefit lower-income households, also by about £45 a year, and marginally reduce the price differential between gas and electricity per unit from 3.3 to 3, because the loss of the standing charge will be covered by an increase in charges per unit. So, those who use the least will benefit the most, so this is a small nudge towards electrification away from gas for heating and cooking. The electricity standing charge remains in place until next year, but if the same method is employed to get rid of it, it would make the price imbalance between gas and electricity worse.
- This is a marginal, and typically market-led, gesture when it has been established that installing solar panels with batteries could cut energy costs for the poorest households by two thirds. But that would require a state-led investment plan carried out as a social service, not a vehicle to generate business for micro firms, as it would not be affordable for the people who need it most, nor profitable for private companies to deliver. That is what a break with neoliberalism would actually look like.
The Chancellor sticks with the mantra that “growth” will solve all problems, without reflecting on the problem that expenditure on war preparation – leaving aside more profound objections to it – is one of the least effective ways of generating any; because the kit you buy with it won’t do anyone any good – just harm if it is used. Investing in any other sector of the economy – health, education, transport, social housing and infrastructure construction – generates actual benefits as well as the economic activity that goes with it.
If you want a “growth sector” that will pull the rest of the economy into a healthier place, it’s the green sector; currently growing at 9% a year as the rest of the economy flatlines. So, if you want a healthier, livelier economy, green it!
The “breathing space” the Chancellor has given the government, before its course is set by the pending 10-year plan, should be used to push them in the right direction, because there is no breathing space in the rate at which climate breakdown is accelerating.
The GJA’s model motion is a useful way to take up the debate about the policies we need in union and party branches, and student unions too. Feel free to adapt it to your circumstances.
- This article was originally published by the Greener Jobs Alliance on 2 November 2026.
- Paul Atkin is the editor of the Greener Jobs Alliance. You can follow them on Facebook and Twitter/X.
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