The Budget of Doom: How Renewables and the Climate Change Committee Broke Britain

Britain is preparing for what many are already calling the Budget of Doom

A moment when the Treasury finally collides with economic reality, debt pressure, and a decade of energy policy built on unreliable renewables and legally binding climate targets. It will be presented as a fiscal storm driven by global pressures, geopolitics, or demographic trends. But the real cause is far more domestic, far more structural, and far more predictable: a deliberate attempt to rebuild the entire UK economy around energy sources that do not work when the country needs them. This decision was not taken by voters, nor by engineers, nor by industry. It was taken by the Climate Change Committee (CCC) an unelected body whose carbon budgets dictate Britain’s economic strategy without democratic accountability.

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The Budget of Doom is not an accident; it is the bill for policies designed without regard to cost, practicality, or national resilience. [1]For any modern economy, energy is the price of everything. When energy is cheap and reliable, inflation stays low, business investment rises, wages grow, and public finances stabilise. When energy is expensive or intermittent, the opposite occurs: inflation remains stubbornly high, mortgages rise, manufacturing collapses, supply chains become fragile, and the tax base erodes. That is exactly what has happened in Britain since the country began its rapid decarbonisation programme in 2008. Energy prices have surged , not because of global crises alone, but because the UK deliberately shut down reliable coal and gas capacity before secure replacements were ready. Meanwhile, the grid has been rebuilt at colossal cost to handle vast quantities of wind and solar, infrastructure that must stretch from remote coastlines to distant substations. All of this has been paid for not by investors, but by consumers through rising standing charges, levies, and tariffs. The effect on inflation has been profound, because once energy becomes expensive, every other sector follows. [2]

At the centre of this system sits the Climate Change Committee, a body created by the 2008 Climate Change Act with the legal power to set carbon budgets that future governments must meet. These budgets are not advisory. They are binding in law. No minister, no department, no election can override them without legal repercussions. This means the CCC effectively dictates the pace of decarbonisation, the structure of the grid, the closure of power plants, the rollout of heat pumps, the electric vehicle timeline, the agricultural reforms, and the energy strategy of every government that follows. It is the architect of Britain’s energy system, but without accountability for the consequences. [6]This unique arrangement has allowed the CCC to operate as a shadow government. Its plans are treated as immovable obligations, even when they conflict with engineering reality or economic stability. When the CCC demands more offshore wind, the grid must be rebuilt to accommodate it. When the CCC demands the closure of gas plants, the remaining system becomes more fragile. When the CCC demands mass electrification, peak demand soars beyond what the system can deliver. Every one of these decisions has fiscal implications: higher borrowing, higher taxation, and higher consumer prices. The CCC has no responsibility to balance the books or protect taxpayers; its only mandate is carbon reduction. This is why the costs of Net Zero have spiralled into the hundreds of billions, why energy prices have soared, and why Britain faces a Budget of Doom. [7]The CCC’s carbon budgets have become the equivalent of unfunded mandates — binding legal obligations that generate huge financial burdens without providing a clear route to pay for them. Ministers insist the UK must “stay on track” with Net Zero because deviation would be unlawful. This creates the absurd situation where political leaders pledge to reduce taxes while committing themselves to a legally binding energy programme that requires raising taxes or debt to survive. The CCC has effectively written a cheque that the Treasury cannot cash, and the public is now expected to make up the difference. [8]

The Cost Spiral of Renewables and the Grid That Can’t Cope.Wind and solar were sold as “cheap” technologies that would reduce bills. But they only appear cheap on paper because their true costs are buried in a maze of subsidies, balancing charges, grid reinforcements, and hidden levies. Wind farms receive guaranteed prices through Contracts for Difference even when wholesale prices fall. When the grid cannot absorb excess wind generation, operators are paid to switch off.curtailment costs that reached hundreds of millions per year and rise as more intermittent power connects. Gas plants, needed as backup for when the wind drops, must be paid to stay on standby even when not generating. Consumers therefore fund both the unreliable system and the reliable system underneath it. [3]Behind the scenes, National Grid has been forced into the largest infrastructure upgrade programme in UK history, constructing 400kV transmission lines, offshore links, super grid transformers, converter stations, synchronous compensators, and new substations. These are not luxuries; they are the hardware needed to stabilise a grid increasingly dominated by weather. The cost of this rebuild, tens of billions already, with much more still unfunded, lands squarely on households and businesses through standing charges and network fees. That is why electricity costs remain far above international competitors even when gas prices fall. The UK grid is now a monument to expensive complexity, engineered not for reliability but for ideology. [4]Inflation is the natural outcome of such a system. Every tonne of steel, every loaf of bread, every mile driven, every supply chain movement requires energy. Once energy becomes structurally expensive, inflation becomes structural too. Even when global prices moderate, British inflation remains elevated because the underlying machinery of energy production has been re-engineered in a way that guarantees high costs. This inflation then drives interest rates higher. Higher interest rates increase mortgage payments and raise the cost of government borrowing. As debt-servicing consumes a larger share of public spending, the Chancellor is pushed into raising taxes and cutting services. This is how energy policy becomes fiscal policy, and why the Budget of Doom is a direct consequence of the UK’s Net Zero pathway. [5]

Industrial Collapse and the Shrinking Tax Base.While the CCC’s ambitions have grown, Britain’s industrial base has shrunk. Energy-intensive industries, steel, chemicals, ceramics, glass, aluminium, paper, fertilisers have been forced to pay two to three times more for power than competitors in the US or China. No amount of innovation can compensate for energy prices that destroy margins. As plants close or reduce output, thousands of skilled jobs vanish. Supply chains fracture. Tax receipts fall. Communities weaken. Entire regions become dependent on welfare rather than wages. Meanwhile, the UK imports the very products it used to make often at higher emissions but lower cost and congratulates itself on “reducing emissions”. In reality, Britain has only exported emissions and imported unemployment. [9]This industrial decline directly affects the Budget of Doom. A shrinking manufacturing base means lower corporation tax receipts, fewer PAYE contributions, reduced exports, and weaker economic growth. The welfare bill rises as former industrial workers struggle to find equivalent employment. Public services strain under lower revenue and higher demand. And the Treasury must then spend billions on energy subsidies, grid stabilisation, and cost-of-living support just to stop households collapsing under Net Zero-driven prices. The energy system is not just an engineering failure, it is a fiscal time bomb. [10]

The Inevitable Budget of Doom

As inflation persists, growth stagnates, and the tax base contracts, the Treasury faces a structural crisis. Debt interest rises with every hike in interest rates. Public spending obligations grow as inflation pushes up the cost of services. Meanwhile, the grid upgrade programme continues to demand billions. Heat pump subsidies, EV incentives, and Net Zero transition schemes add further fiscal pressure. Ministers will try to disguise the truth with language about “global headwinds” or “temporary challenges”. But the real explanation is simple: Britain designed an energy system that guarantees high costs, and now those costs are arriving in the public finances. [11]The Chancellor must now choose between higher taxes, deeper spending cuts, or higher borrowing — or, most likely, all three. Families will be told to accept “tough decisions”. Businesses will be told to “invest in green growth”. Public services will be told to “find efficiencies”. None of this addresses the underlying cause. The Budget of Doom is not the result of mismanagement or bad luck. It is the mathematical consequence of allowing an unelected climate body to direct the entire economic strategy of the United Kingdom. [12]

The Path Back to Stability

Britain’s crisis is reversible but only if the country confronts the cause. The 2008 Climate Change Act must be amended so carbon budgets become advisory rather than binding. The CCC must be stripped of its quasi-legislative power and returned to a technical advisory role. Energy policy must prioritise reliability, affordability, and sovereignty. The grid must be rebuilt around firm baseload. Nuclear and domestic gas rather than intermittent weather. Renewable deployment must be paused until the system can integrate it without astronomical cost. And Britain must rebuild its industrial base by offering energy prices that allow manufacturers to compete internationally. Without these changes, economic decline will continue, and each Budget will be worse than the last. [13]The Budget of Doom is not destiny. It is policy.And policy can change.

Footnotes

[1] Climate Change Act 2008; Treasury Debt Analysis Reports 2023–2024.

[2] Ofgem Standing Charges Dataset; National Audit Office Energy System Costs Review (2023).

[3] National Grid ESO Balancing Services Summary (2023).

[4] National Grid “Beyond 2030” Infrastructure Plan (2024).

[5] ONS CPIH Energy Contributions Data (2021–2024).

[6] Parliamentary Explanatory Notes, Climate Change Act; CCC Carbon Budgets 1–6.

[7] House of Commons Library: UK Steel Sector Statistical Indicators (2023).

[8] CCC Progress Reports; Treasury Letters of Response (2019–2024).

[9] UK Manufacturing Energy Price Comparison, Institute for Government (2024).

[10] BEIS Industrial Energy Cost Report; OBR Fiscal Risks Outlook (2023).

[11] Bank of England Inflation Reports (2022–2024)

[12] Treasury Fiscal Events Analysis (2024).

[13] UK Energy Security Group (UKESG) Recommendations (2024).

Shane Oxer. Campaigner for fairer and affordable energy