Sunak’s spending review: 12 things you need to know

Chancellor Rishi Sunak delivers his budget. Photograph: Barcroft Media/Getty Images

Sunak slashed the cost of domestic flights

In a move that raised many eyebrows, particularly with the COP26 climate summit imminent, the chancellor cut the costs Air Passenger Duty on domestic flights “to support greater air connectivity within the UK”. At the same time, flights in the “ultra long haul band” will see a duty increase. 

Fuel duty was frozen again 

Another move that disappointed green groups was Sunak’s pledge to keep fuel duty frozen at 57.95 pence per litre UK-wide for 2022-23. This is the twelfth consecutive freeze of this duty. 

A new sovereign green bond was confirmed

Sunak confirmed the launch of a sovereign green savings bond for retail investors. It offers buyers a lower return on their investment than competing products with the government hoping investors’ environmental commitments will drive demand. 

The government’s spending review documents compile existing climate commitments

Sunak made no new environmental announcements as part of the spending review, but the Treasury’s supporting documents compile the commitments made to date, stating that the “UK has reduced emissions faster than any other country in the G20 and continues to have the most ambitious targets for 2030: a 46% reduction in emissions compared to 2018”. 

However, there was some money for regional transport

The Treasury documents set out “plans to deliver infrastructure projects better, faster and greener”. Transport across the country will be “boosted through over £35 billion of rail investment over the next three years”, according to the documents. “Everyday journeys will be improved, through investing more than £5 billion over the parliament in buses and cycling, and £5.7 billion of investment over five years in eight City Regions, including West Yorkshire, Greater Manchester, Liverpool City Region and the Tees Valley, through City Region Sustainable Transport Settlements.”

The government recommitted to a ‘green industrial revolution’

The documents say that since March 2021 the government will have committed a total of £30 billion of public investment for the green industrial revolution in the UK, including in the Net Zero Strategy, supporting the delivery of the priorities in the prime minister’s Ten Point Plan. This includes “£620 million of new investment over the next three years to support the transition to electric vehicles and a significant increase in new funding to encourage more people to walk and cycle”.

Buildings and homes were mentioned again

March’s Budget and today’s spending review “provides £3.9 billion to decarbonise buildings, including £1.8 billion to support tens of thousands of low-income households to make the transition to net zero while reducing their energy bills”, state the documents.  

As was net zero innovation

The government is investing £1.5 billion in net zero innovation according to the documents, “laying the foundations for the wider transition to a more resilient energy supply by investing in nuclear technologies and offshore wind”. This includes “£1.7 billion to enable a final investment decision for a large-scale nuclear project in this parliament, and the government remains in active negotiations with EDF over the Sizewell C project”. 

Pledges to decarbonising industry were remade

To decarbonise industry and power the Treasury’s document reconfirmed £1 billion for Carbon Capture, Usage and Storage (CCUS), with Hynet and East Coast the first CCUS clusters. The government is also providing up to £140 million over the spending review period to support hydrogen producers and heavy industry adopting CCUS through the Industrial Decarbonisation and Hydrogen Revenue Support scheme. 

The Nature for Climate Fund is being expanded

The government says it is “expanding the Nature for Climate Fund to ensure total spending of more than £750 million by 2024-25 to help meet our commitment to plant at least 7,500 hectares of trees every year in England by 2025 and restore 35,000 hectares of peatland”. This is in addition to “significant public investment to support the government’s world-leading target to halt biodiversity loss by 2030”, state the Treasury documents. The government aims to set a  new target to “raise at least £500 million in private finance to support nature’s recovery every year by 2027 in England, rising to more than £1 billion by 2030”. This will be supported by a range of measures, including £30 million public investment in a Big Nature Impact Fund, as well as £140 million to assess the extent and condition of the country’s natural habitats, according to Treasury documents. 

The government reconfirmed money for decarbonising transport 

Some £6.1bn is being invested to “boost the number of electric vehicles, develop greener planes and ships and encourage more trips by bus, bicycle and foot”, according to the Treasury.

The government says the package will keep the UK’s carbon emissions on the right track

The Treasury says that taken together, the actions will keep the UK on track for its carbon budgets and 2030 Nationally Determined Contribution, and will support the pathway to net zero by 2050. “It does so in a way that creates green jobs across the country, attracts investment, and ensures energy security,” it says.