Emily Murrell, IIGCC’s Policy Programme Director, responding to the UK Chancellor’s Autumn Budget:
The Chancellor’s Autumn Budget aims to reduce energy bills and rebalance the costs of the clean transition but ultimately sends mixed signals for green investment. While the move to fund renewable energy subsidies through general taxation instead of electricity bills is a positive step that lowers prices and supports the Clean Power Mission, concerns remain that cuts to energy efficiency and new EV road pricing could undermine progress and damage UK competitiveness in the global green economy.
Temporarily shifting subsidy costs away from electricity bills helps reduce energy expenses for households and businesses, easing a critical cost barrier to electrification and industrial decarbonisation. Reducing the cost of running renewables, including heat pumps and electric vehicles, will also serve as an important demand-side price signal. Maintaining investor confidence by preserving stable, long-term frameworks for investment in clean power, while also tackling the critical issue of energy costs, is a welcome move from government.
Housing accounts for a fifth of UK emissions, with some of Europe’s least energy-efficient stock, underscoring the need for strong policies to unlock private capital in building decarbonisation. Investors support the UK’s low-carbon transition through these investments, driven by financial risks of inaction and substantial revenue opportunities in real estate. The ECO levy’s abolition from April 2026 threatens to disrupt upgrades for vulnerable households, so the £1.5 billion Warm Homes Plan and £13.2 billion Spending Review funding must be carefully managed to prevent gaps, preserve retrofitting momentum, and deliver the long-term certainty investors need for scaled financing.
The UK Modern Industrial Strategy identifies scaling the electric vehicle sector as a key growth opportunity that aligns with net zero goals. The introduction of an EV pay-per-mile charge from 2028 risks slowing EV adoption and sending mixed signals to manufacturers and investors at a pivotal time for global green tech competitiveness. Instead, demand-side measures like expanded charging infrastructure investment and supportive taxation could provide the policy stability needed to accelerate EV deployment, attract private capital, and support the achievement of the 2030 phase-out of new internal combustion engine sales target.
Overall, the Autumn Budget 2025 eases energy costs and advances electrification, yet represents a missed opportunity to provide the stable, long-term framework needed to unlock private capital and drive investment across the UK’s net zero transition.
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