By Bru Pearce, Founder, Envisionation
This week Chancellor Rachel Reeves delivered Labour’s second budget with promises of reduced energy bills and continued investment in Britain’s future. As someone who has dedicated years to developing practical solutions for the climate crisis through the Biosphere Restoration Plan, I watched with a mixture of hope and, ultimately, profound disappointment. While the headlines trumpeted £134 savings on household energy bills, the reality tells a far more troubling story about our government’s commitment to addressing the existential challenge of our time.
The Bill Reduction Illusion
Let me be clear about what’s actually happening here. The government’s much-vaunted energy bill reduction isn’t the result of transformational green investment or a bold shift to renewable energy. It’s accounting sleight of hand. By ending the Energy Company Obligation (ECO) scheme and shifting renewable energy subsidy costs from bills to general taxation, the Treasury has simply moved money from one pocket to another, whilst dismantling one of our few remaining mechanisms for improving energy efficiency in fuel-poor homes.
The ECO scheme, for all its well-documented failures, was at least doing something. It was installing insulation, upgrading heating systems, and making homes more efficient. Now, the government promises £1.5 billion for a ‘warm homes plan’ to replace it, but this represents less than the total cost the ECO was delivering, and we’re expected to believe a government-run alternative will be more efficient. I’ve seen enough climate policy promises evaporate into consultation papers and implementation delays to remain deeply sceptical.
Taxing the Green Transition
Perhaps the most bewildering aspect of this budget is the introduction of a new ‘electric vehicle excise duty’. Essentially, a pay-per-mile tax on the very vehicles we need people to adopt if we’re serious about decarbonising transport. From April 2028, EV drivers will pay 3p per mile, adding approximately £240 annually to running costs.
The government’s own Office for Budget Responsibility estimates this will result in 440,000 fewer electric car sales across the forecast period. Let that sink in. At a moment when we desperately need to accelerate the transition away from fossil fuels, the government is actively implementing policies that will slow EV adoption. The Climate Change Committee has repeatedly advised making electricity cheaper to encourage the shift to electric heating and transport. Instead, we’re creating new barriers.
Yes, I understand the fiscal argument; fuel duty receipts will decline as EVs proliferate, and roads still need maintenance. But the timing and framing of this policy reveal a government that sees climate action as a cost to be managed rather than an investment in our collective survival.
Fuel Duty: The Sacred Cow Remains Untouched
Meanwhile, the freeze on fuel duty continues. This tax on petrol and diesel has been frozen since 2010, with an additional 5p cut in 2022 that has now been extended yet again until September 2026. The cumulative cost to the Treasury? £120 billion by 2026-27. That’s £120 billion in foregone revenue that could have funded genuine climate action, whilst simultaneously keeping the cost of driving artificially low and undermining the economic case for switching to cleaner alternatives.
Research from the Social Market Foundation demonstrates these persistent freezes have disproportionately benefited the wealthiest households. Those most likely to own multiple vehicles and drive the most miles. We’re subsidising pollution whilst taxing the cure.
The North Sea Contradiction
The government’s North Sea Future Plan perfectly encapsulates this budget’s cognitive dissonance on climate. The document explicitly acknowledges the International Energy Agency, the UN Environment Programme, and the IPCC’s warnings that new fossil fuel exploration risks exceeding the 1.5°C threshold. It states that ’emissions from existing fossil fuel infrastructure alone could surpass the remaining global carbon budget.’
And then, in the very same document, the government announces ‘transitional energy certificates’ to permit new oil and gas drilling on or near existing fields. The mental gymnastics required to hold both positions simultaneously would be impressive if the stakes weren’t so catastrophically high.
Yes, Labour has technically kept its manifesto commitment not to issue new exploration licences. But this is the letter of the promise, not its spirit. New production means new emissions. The climate doesn’t care about the bureaucratic distinction between an exploration licence and a transitional energy certificate.
What Genuine Climate Leadership Looks Like
At Envisionation, through our work on the Biosphere Restoration Plan, we’ve developed practical, implementable solutions that don’t require choosing between economic prosperity and environmental survival. The false dichotomy presented in this budget, that we must either freeze fuel duty or lose votes, tax EVs or watch roads crumble, reflects a fundamental failure of political imagination.
Genuine climate leadership would look radically different. It would recognise that every pound invested in energy efficiency returns multiple pounds in reduced bills, improved health outcomes, and avoided climate damages. It would understand that making clean alternatives more attractive than fossil fuels requires both carrots and sticks. Not taxing the carrots whilst subsidising the sticks.
Most fundamentally, it would start from the scientific reality that we are in a climate emergency requiring emergency action, rather than treating climate policy as a political inconvenience to be managed with three-year fixes timed to electoral cycles. The budget’s energy bill reductions, remember, conveniently run until just before the next general election.
The Path Forward
I don’t doubt that many in government genuinely want to address climate change. The budget does include positive elements: the rail fare freeze, extended EV grants, and additional funding for charging infrastructure are steps in the right direction. The recognition that electricity prices must fall relative to gas prices to drive decarbonisation is welcome, even if the delivery mechanism is inadequate.
But we need to be honest about what this budget represents: a government that has decided the political costs of genuine climate action are too high to bear. That calculation may be understandable in narrow electoral terms. It is nonetheless a catastrophic failure of leadership at the precise moment when leadership is most desperately needed.
The climate crisis will not wait for politically convenient moments. Every year of delayed action raises the eventual cost of transition and increases the probability of crossing irreversible tipping points. Budget 2025 will be remembered not for its £134 headline savings, but for the opportunities it squandered when we could least afford to waste them.
Bru Pearce is the founder of Envisionation and architect of the Biosphere Restoration Plan, a comprehensive framework for addressing the climate crisis through practical, implementable solutions.
