Overall, a mixed bag of a budget on energy.
Meaningful cuts to bills that slash inflation and bring relief but self inflicted damage by cutting energy efficiency measures. Fuel duty freeze continues to be a burden but EV charge will start offsetting the loss. Carbon price support lives on.

8. Looking at ECO cuts more closely, that is a £6.4bn hit to energy efficiency measures. Remainder the warm homes plan seems to be intact but details unclear at this stage

7. Electric vehicle per mile payment is good and needed to stem the loss the fuel duty. it's broadly progresive given the obvious fact that richer households own more electric vehicles but the cost burden is low and should not dampen EV uptake.

6. Sustaining the fuel duty freeze continues to cost the govt. dearly but the savings accrue to the richest households. In fact, drivers have benefited hugely from a significant fall in fuel prices since 2019 and 2022 (adjusting for inflation) and unfreezing the duty would have been reasonable.

5. On a side note, the energy bill package has the most meaningful reduction on inflation estimates. But this is such a meager intervention when compared to more significant savings that could have been achieved from cutting interest rates on renewables. (see here- neweconomics.org/2023/11/its-...)

In other words, a more significant fall in wholesale prices are needed to achieve the promised bill savings and though this budget doesn't discuss it, dealing with rising network costs will be the new battleground alongside shifting further levies off bills.

This move effectively flattens the expected rise in environmental levies over the forecast period. This will do little to calm those on the right to continue their calls for scrapping net zero but it's welcome relief nonetheless.

As things stand, manifesto promise of £300 saving is still far away.

4. OBR confirms North Sea oil and gas receipts are set to plummet from £2.7bn today to £0.3bn by 2030-31, reinforcing the fact that the fields are in terminal decline and new licenses won't undo the clear trend.

3. But the scrapping of the flagship energy efficiency policy is deeply unfortunate. It has achieved >£17.5bn in cumulative savings since 2013 and £290 per hhld on avg. Scrapping it weakens the objectives of the warm homes plan and disrupts the retrofit industry, AGAIN! (more analysis coming soon)

2. Some significant changes on energy. 3/4ths of the Renewable Obligation scheme for domestic consumers will now be funded by additional borrowing for 3 years at £2.3bn a yr.

Strong lobbying by green groups has worked albeit the savings are ~£82 per household - equivalent to the rumoured VAT cut.

Scrapping business rates and introducing a two-rate property and land tax and redistribute the proceeds more fairly across the country. In other words - taxing rentiers more than renters for commercial properties and doing so in a phased manner. Proposals here 👇👇
neweconomics.org/2023/11/a-ta...

You can read more on our @neweconomics.bsky.social ew proposals for reform of property taxes here. Our aim should be to help level the playing field by curbing equity-rich investors’ ability to gobble up more homes 👇👇 neweconomics.org/2023/11/refo...

But the rubbishing off of wealth tax and fixation on fiscal rules will only impede his project of national renewal. This will have to change or decline and stagnation will force him to change.

All this is welcome stuff but big q as always is, will it survive elections, price shocks and Treasury fiscal orthodoxy? Its hard to say.

But for now, it’s a blueprint worth taking seriously. More detailed deep dive once I've actually read the full pack.
@neweconomics.bsky.social