# UK Treasury ‘weighs up funding cuts at GB Energy’ in blow to Ed Miliband

Government considering such a move over state-owned firm set up by Labour in June’s spending review, say reports

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The UK government is reportedly weighing up the possibility of cutting planned funding for GB Energy, the state-owned company set up by Labour to , in June’s spending review.

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

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

A Treasury spokesperson said: “We are fully committed to the £8.3bn for GB Energy, which is at the heart of our mission to make Britain a clean energy superpower and to ensure our homes are cheaper and cleaner to run.”

Sources played down the likelihood of the government significantly defunding an initiative that formed an important plank of Labour’s energy strategy.

One source suggested that the government might maintain the promised level of funding but “rebadge” the budgets of other green initiatives to become part of GB Energy, effectively allowing departmental cuts in other areas.

The speculation will, however, reignite rumours of a power battle within Labour ranks, pitched between No 10, the Treasury and Miliband’s net zero department. Last year, before Labour’s election victory, Starmer  from £28bn a year to under £15bn, in a blow to Miliband.

Sources close to the government said the Treasury was now running the rule over “everything” before the spring statement this month, which is expected to show that Reeves’s headroom against her fiscal rules has been wiped out.

Another source warned of a rerun of the febrile months before the autumn budget, when swirling speculation hit business confidence and investment. “GB Energy has the potential to be a real confidence booster to business. Scaling it back would damage investor sentiment and, frankly, be electoral madness. It’s hugely popular on the doorstep, especially in Scotland,” they said.

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

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