Budget in brief

Carbon Price Support rates frozen at £18 per tonne of carbon dioxide in 2022/23. “The government is committed to carbon pricing as a tool to drive decarbonisation and intends to set out additional proposals for expanding the UK Emissions Trading Scheme over the course of 2021.” Guidance on participating in the UK Carbon Emissions Trading scheme is here.

Dame Clara Furse will establish a new group with the aim of positioning the UK and the City of London as the leading global market for high quality voluntary carbon offsets, building on the work of crossing-cutting initiatives such as the Taskforce for Scaling Voluntary Carbon Markets.

 

A new UK Infrastructure Bank headquartered in Leeds. The new Bank will provide financing support to private sector and local authority infrastructure projects across the UK, to help meet government objectives on climate change and regional economic growth. The Bank will:

  • be able to deploy £12 billion of equity and debt capital and be able to issue up to £10 billion of guarantees
  • offer a range of financing tools including debt, hybrid products, equity and guarantees t0 support private infrastructure projects
  • from the summer, offer loans to local authorities at a rate of gilts + 60 basis points for strategic infrastructure projects
  • establish an advisory function to help with the development and delivery of projects

The institution will begin operating in an interim form later in spring 2021. Further details on the mandate and scope for the Bank are set out in the ‘UK Infrastructure Bank Policy Design’ document here.

 

Fuel duty frozen  in 2021/22. “Future fuel duty rates will be considered in the context of the UK’s commitment to reach net-zero emissions by 2050.”

 

From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets to benefit from a 130% first-year capital allowance. Investing companies will also benefit from a 50% first-year allowance for qualifying special rate (including long life) assets.

 

Three City and Growth Deals in Scotland (Ayrshire, Argyll and Bute, and Falkirk) and three City and Growth Deals in Wales (Swansea Bay, North-Wales and Mid-Wales). Over the next five years £84.5 million in funding will be brought forward to speed up investment in local economic priorities.

 

The Ministry of Housing, Communities and Local Government (MHCLG) will establish Modern Methods of Construction (MMC) Taskforce, backed by £10 million of seed funding, to accelerate the delivery of MMC homes in the UK.

 

Global Centre for Rail Excellence, match funded up to £30 million, towards the construction of a rolling stock and infrastructure testing complex in Wales. Will  support innovation in the UK’s rail industry, including the testing of cutting-edge, green technology.

 

An offer of support, in principle, to the Able Marine Energy Park on Humberside following the conclusion of the competition to upgrade ports infrastructure for the next generation of offshore wind. Humber Freeport will create a regional hub for trade, innovation and commerce.

 

A memorandum of understanding with Teesworks Offshore Manufacturing Centre on Teesside to support the development of another offshore wind port hub.

 

£27 million, subject to business case, for the Aberdeen Energy Transition Zone, plus £5 million for the Global Underwater Hub, subject to business case, and up to £2 million to further develop industry proposals as part of the government’s support for the North Sea Transition Deal (NSTD). “Taken together, these proposals will support areas like Aberdeen transition to a low-carbon future.”

 

£4.8 million, subject to business case, to support the development of a hydrogen hub in Holyhead which will pilot the creation of hydrogen from renewable energy and its use as a zero emission fuel in HGVs.

 

£375 million to introduce Future Fund: Breakthrough, a new direct co-investment product to support the scale up of the most innovative, R&D-intensive businesses. The British Business Bank will take equity in funding rounds of over £20 million led by private investors.

 

Government’s s first sovereign green bond to be launched  this summer, with a further issuance to follow later in 2021 to total a minimum of £15 billion.

 

Green retail National Savings and Investment (NS&I) product offered in the summer of 2021.

 

Consultation  on  whether certain costs within the charge cap affect pension schemes’ ability to invest in a broader range of assets and smoothing certain performance fees over a multi-year period.

 

Support for new solutions to cut carbon emissions and accelerate near-to-market low-carbon energy innovations:

• £20 million to support floating offshore wind

• A £68 million competition to implement several first-of-a-kind energy storage

• A £4 million UK-wide competition for the first phase of a biomass feedstocks programme,

to support the rural economy in making improvements to the production of green energy

crops and forestry products.

 

Aggregates Levy rate frozen for 2021-22 but will return to index-linking in future.

 

Employers who hire a new apprentice between 1 April 2021 and 30 September 2021 will receive £3,000 per new hire, compared with £1,500 per new apprentice hire under the previous scheme.

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