The autumn budget was remarkable in many ways. The long lead up, the kite flying, the unprecedented scene-setting speech, the public u turns, the OBR leak which led to the resignation of its chair.
Where it was less remarkable was the content. Ultimately, in a government that has talked about growth, there was a lack of anything to drive it, and a lack of a clear vision for where this Chancellor and Prime Minister want to take the country. In that respect it has to go down as a missed opportunity – even it was successful in walking the line between the markets and the Parliamentary Labour Party.
However – and this can be said not only about this budget but about the government more broadly – it delivered for energy. Much credit is due to Ed Miliband for this, but also the strong work of ministers and officials within DESNZ, who have delivered not just a vision but a significant amount of detailed policy over the past year and a half. Whilst challenges and uncertainties remain, this progress has helped create confidence amongst investors and in the Treasury that this is an agenda worth paying for.
However, convincing voters may be harder. Polling by Yougov last month found that whilst 60% of Brits remain supportive of net zero, a majority even of that 60% believe that alleviating cost of living pressures is a higher priority.
In that context, moving 75% of the costs of the Renewables Obligation into general taxation may seem like rearranging the deckchairs, but it is highly significant, a watershed, and overdue. It is not right that billpayers in a given period should be on the hook for both historic underinvestment in the network, and investments to deliver cheaper, cleaner generation in the future.
That they are (still – with another £108 on bills recently approved by 2031 for transmission infrastructure alone) risks derailing the whole agenda, in the context of heightened political criticism. £150 off bills was a good budget headline, but that £150 won’t be felt in consumers pockets if it is swallowed up by increasing costs elsewhere.
So, it should be expected (and demanded) that more of the policy costs for energy should move into taxation henceforth – a more progressive and appropriate way to fund these long-term investments. The more these shifts can also counter the distortions which artificially favour gas, the faster the transition can progress.
Of course, there was a lot that the government didn’t do – either in the budget or in Q4 more broadly. Blissfully for public affairs consultants, there has been no pre-Christmas policy dump to pick through – with key updates such as the Warm Homes Plan and revised national pricing expected in the new year – though it leaves industry mulling more than just wine over the holidays.
Overall, the government is now moving into a delivery phase. Whilst our policy tracker highlights many areas still due to come forward in 2026 – including a potentially Frankenstinian Energy Independence Bill – DESNZ can also look back at a significant amount that has been achieved over the past 18 months. Delivering the agenda – and retaining public support – is now the task at the top of the tree.
