The Budget is always an event that most people will take notice of, even if they can’t or don’t wish to tune in live to hear the Chancellor of the Exchequer speech amid the raucous bear pit of the House of Commons.
While the political Punch and Judy might not be most people’s cup of tea – even in what is probably an election year – people will certainly want to know how it might affect them, from their taxes (and in this case, National Insurance) to duties on things like petrol and beer.
Other things will concern some people more than others, since most UK residents are not foreigners with non-dom status or keen to take up a job at a spaceport in the Shetlands.
Energy Policy Announcements
However, some elements are very significant for certain sectors of the economy and nation and while there were announcements from chancellor Jeremy Hunt in areas like tech and life sciences, there were also pledges that will be relevant for anyone considering gas boiler installation work.
Some might wonder if they should stick with a gas boiler or switch to electric, given the long-term aims of phasing out fossil fuels, but, reassuringly, nothing in the Budget suggested such a move would be required anytime soon.
Mr Hunt announced a new nuclear power station on the Isle of Anglesey in North Wales, stating that it is the aim that the UK should generate up to 25 per cent of its electricity by 2050. He also pledged another £120 million to the Green Industries Growth Accelerator to aid developments like offshore wind and carbon capture.
That may all be good news for zero-carbon energy, but it is way short of anything that would bring forward the end of domestic gas usage. After all, 2050 is still nearly a quarter of a century away.
What Did The Budget Say About Gas?
Oil and gas were mentioned directly in the speech with respect to the one-year extension of the windfall tax on the high profits they have been making due to elevated wholesale prices in the wake of the Russian invasion of Ukraine.
By extending this to 2029 – not only long after the end of this parliament but to around the end of the next – Mr Hunt was signalling that this will be a significant contributor to the Treasury’s coffers (an estimated £1.5 billion), which can only be true if millions of us are still using gas.
Indeed, in contrast with political opponents and many campaigners, the government is supporting more oil and gas exploration in the North Sea, a point Mr Hunt reiterated, pledging: “We want to encourage investment in the North Sea so we will retain generous investment allowances for the sector.”
Why An Election Won’t Change Much
Of course, one Budget that maintains the current policy in the final year of a parliament does not amount to a radical new step for energy policy. By contrast, unless the opinion polls shift significantly, it will be a different government making the decisions on energy policy and the future of domestic gas use in the UK a few months from now.
However, even if a new government comes with lots of ambitious plans to further the transition towards green energy (and other non-carbon sources), it would still, realistically, take a long time to get there, unless a genuine game-changer like nuclear fusion makes rapid advances.
It is true that the current Conservative government has rowed back on some net zero commitments in recent months, but equally the Labour Party has dropped a pledge to spend £28 billion a year on its green investment plan.
That suggests both major parties are reluctant to spend or tax their way to net zero goals amid tight public finances and strains on household budgets, something that may only change once the UK economy is in a better place – whenever that may be.
A Gas-Free Future is Far Off
For that reason, whoever delivers the next Budget may be no less likely to do anything in it to curb the UK’s use of domestic gas, which means householders can confidently fit, replace and have serviced domestic gas boilers for many years to come.
Eventually, the UK will stop using gas. By 2050 we may indeed be powered mostly by electricity generated by wind, waves and nuclear energy (of at least one kind). The slack may be taken up in places like ground source heat pumps. If there are exceptions to this, they won’t be here in London, but in a few remote off-grid communities.
For now, however, householders can be assured that whatever else comes from the red box at each Budget, it will not include a demand to get rid of their gas boilers.