Autumn Statement: Decc and Defra budgets slashed

The Department of Energy and Climate Change (Decc) and the Department for Environment, Food and Rural Affairs (Defra) have had their budgets cut by 22 per cent and 15 per cent respectively.

The cuts were announced by Chancellor George Osborne in his Autumn Statement on Wednesday.

He added the Treasury would remove tax reliefs for all energy generation projects by excluding them from the venture capital schemes, to “ensure that they remain well targeted at higher risk companies”.

Osborne told the House of Commons that investment in the long-term economic infrastructure is a goal of the spending review, and there is “no more important infrastructure than energy”.

He stated the Treasury would double spending on energy research, with a “major commitment” to small modular nuclear reactors and a focus on supporting the creation of the shale gas industry.

Osborne said that ahead of the Paris climate talks next week, support for low-carbon electricity and renewables would “more than double”. However, he added that “going green should not cost the earth”.

“We are increasing our support for climate finance by 50 per cent over the next five years,” he confirmed.

The Chancellor’s energy plans include reforming the Renewable Heat Incentive to save £700 million, and a new energy efficiency scheme to replace the Energy Company Obligation to save 24 million consumers an average of £30 a year on household bills.

He also confirmed that energy intensive industries would be permanentaly exempt from the cost of environmental tariffs to “keep bills down”.

In water, Osborne confirmed £2 billion would be spent on flood defences, and that South West Water customers would continue to have their bills cut by £50 for the rest of the current Parliament.