Chancellor should move energy policy costs from electricity bills into general taxation in Autumn Budget to help billpayers

17 November 2025 - RenewableUK press release

RenewableUK is urging the Chancellor to take a series of key measures to help billpayers and stimulate industrial growth in the clean energy sector in her Autumn Budget statement on 26th November.

In a document submitted to the Treasury, RenewableUK has called on the Chancellor to move energy policy costs from electricity bills into general taxation to make electricity cheaper and accelerate the electrification of heat and transport.

This rebalancing of levies could save the average household £150-£200 a year, helping the Government to meet its commitment to reduce household energy bills. Although the Treasury would have to cover the costs currently raised through electricity bills, it would be a fairer system as it recognises ability to pay, depending on taxpayers’ levels of income, so families on low incomes would benefit most. Germany already uses this system successfully, as do several other countries.

The energy policy costs which would be moved into general taxation include the Capacity Market and System Balancing Charges which ensure security of supply and grid stability across all technologies, and measures to support the roll-out of renewable energy which have created tens of thousands of jobs and attracted billions in private investment to the UK; the Renewables Obligation, Feed-in Tariff and Contracts for Difference, as well as other initiatives such as the Energy Company Obligation which funds energy efficiency improvements for vulnerable households and the Warm Home Discount and other social schemes to support for low-income households.

We are also urging the Chancellor to fast track the roll out of the British Industrial Competitiveness Scheme to cut energy bills for manufacturers. RenewableUK welcomed the inclusion of this scheme in the Government’s Industrial Strategy, as it will reduce costs for energy-intensive industries such as steel, cement and chemicals, making production in the UK more competitive with global markets. But the timeline to implement the scheme has yet to be announced by the Government, meaning that companies are unable to plan ahead. Implementing this scheme would unlock investment, support export growth and strengthen supply chains, especially in the offshore wind industry and advanced manufacturing, boosting productivity and job creation all around the country.

To deliver more jobs, RenewableUK is also calling for the Government to set up a Just Transition Fund, similar to the one created by the Scottish Government which has invested £500 million to support workers making the transition from other sectors such as oil and gas into renewables, providing opportunities to acquire skills and training, ensuring good quality employment. We are also urging Ministers to provide tax relief and payments for educators, employees, students and trainees to incentivise training, retraining, tertiary education and apprenticeships in renewable energy jobs. The Government’s Clean Energy Jobs Plan shows that an extra 400,000 workers will be needed to fill a wide variety of roles in our sector by 2030.

RenewableUK’s Executive Director of Policy and Engagement Ana Musat said:

“These measures we have set out in our Budget submission to the Chancellor will provide much needed relief for billpayers by ensuring that the costs of the energy transition are distributed more fairly. Cheaper power will also make the electrification of heat and transport more attractive, which could further lower bills. It’s a virtuous circle.

“Implementing the British Industrial Competitiveness Scheme would reduce bills for around 7,000 of the highest electricity users, making UK industry more competitive on the global stage while also accelerating the transition to clean power.

“Introducing a Just Transition Fund to support workers wanting to enter the renewables sector would help ensure that we’re making best use of the skills and expertise in the UK’s workforce to deliver our significant pipeline of renewable energy projects and electrify our economy”.

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Notes

For further information, contact

Robert Norris, Head of Communications
07969 229 913 | Robert.Norris@RenewableUK.com

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