The Chancellor’s spending on carbon capture signals a focus on investment

Chancellor Rachel Reeves said the government would prioritize and increase investment in major projects in this month’s budget.

In addition, it announced it would invest almost £22 billion over 25 years in two major new carbon capture programs.

She criticized plans inherited from the previous government to limit investment as part of the economy, saying she would not repeat “those mistakes.”

However, conservatives claim that it is thanks to them that funding for carbon capture projects has already been announced.

After weeks of hints that the Chancellor would change his self-imposed borrowing rules to allow much greater investment in major projects, Ms Reeves gave her strongest hint yet of a significant increase in the level of state investment.

The green schemes include two new carbon capture and storage projects in Merseyside and Teesside.

The government said it would create and support thousands of jobs, attract private investment and help the UK meet its climate targets.

The chancellor said these types of deals were never signed by the previous government because it did not prioritize capital investment, which is money spent on items such as buildings, equipment and IT.

She directly criticized the fact that the UK capital budget is set to fall from 2.5% of the size of the economy to 1.6%.

However, energy cabinet secretary Claire Coutinho said the previous Conservative government paved the way for carbon capture projects.

She also said the announcement “will not make up for the path of mass de-industrialization to which Ed Miliband’s costly net zero and energy policies are leading us, with the devastating impact of his fanaticism on jobs already seen in the steel industry, refineries and the Northern Sea.”

However, Ms Reeves said the previous government “cut investment at exactly the time we needed to increase investment in our economy”.

“I’m not going to make those mistakes,” she said.

Her words are the clearest confirmation of a change in approach to spending on large projects during the Budget and Spending Review, related to attempts to attract significant private investment at the upcoming International Investment Summit.

The summit will be “a huge opportunity for us to show what the UK has to offer to some of the biggest investors,” she said, including private equity, venture capitalists and sovereign wealth funds.

She also denied suggestions that the government’s rhetoric on the budget would sow gloom among consumers and businesses, saying she would be “beating the drums” on big investments in the coming days.