UK Treasury ‘plans funding cuts at GB Energy’ in blow to Ed Miliband | Energy industry

The UK government is making plans to cut the funding for GB Energy, the state-owned company set up by Labour to drive renewable energy and cut household bills, in June’s spending review.

Cuts to the £8.3bn of taxpayer money promised over the five-year parliament would be another blow for Ed Miliband, the energy secretary, after he was overruled by the government when the chancellor, Rachel Reeves, backed the expansion of Heathrow’s third runway.

GB Energy, a vital cog in Keir Starmer’s plans to “supercharge” Britain’s clean energy revolution, was only given an initial £100m in October’s budget to cover its first two years.

Ministers are carrying out a “zero-based review” of all government spending, which has been given additional impetus after Starmer’s pledge to boost investment in defence.

One option under consideration by the Treasury is to cut the £3.3bn earmarked for GB Energy to fund low-interest loans via local authorities, for projects such as solar panels and shared-ownership wind projects, according to the Financial Times.

Despite Labour making the £8.3bn funding for GB Energy a pledge in its general election manifesto, neither the Treasury nor the Department for Energy Security and Net Zero has said that it is guaranteed.

“We are fully committed to GB Energy, which is at the heart of our mission to make Britain a clean energy superpower and to ensure homes are cheaper and cleaner to run,” a government spokesperson said.

Last month, GB Energy admitted that it could take 20 years to meet its pledge to employ 1,000 people, as the chair, Jürgen Maier, also refused to put a date on when it would bring down energy bills.

Industry sources have said that GB Energy was facing a “challenging” task to find a chief executive for its Aberdeen headquarters, dubbed the oil and gas capital of Europe.

Last month, the government appointed Dan McGrail, the chief executive of the trade body RenewableUK, as the interim chief executive.

McGrail, who is on secondment from RenewableUK, has taken an initial six-month contract and will be based in Scotland, working from GB Energy’s Aberdeen HQ.

The government has said that over the next five years it expects GB Energy to employ 200 to 300 people at its Aberdeen HQ.

GB Energy is currently under the leadership of the former Siemens UK boss Maier, who is based in Manchester, and a five-strong team of non-executive directors based in various parts of the UK.