Summary

Key takeaways

There were a number of announcements more directly related to UK climate policy:

• North Sea Future Plan announced – management of current oil and gas but no new licenses: The Plan outlines updated support for ongoing investment in oil and gas and the management of existing fields “for the entirety of their lifespan” and the introduction of Transitional Energy Certificates to allow for drilling near existing sites. Support includes the creation of the North Sea Jobs Service in 2026, a national employment support programme to support oil and gas workers seeking new opportunities in clean energy.
• Carbon Border Adjustment Mechanism (CBAM): The government confirmed its intention to legislate the Finance Bill 2025-26 to introduce CBAM from 1 January 2027. It stated that “The inclusion of indirect emissions within scope of CBAM will be delayed until 2029 at the earliest. This is to reflect continued support for the Energy Intensive Industries (EII) Compensation Scheme.”
• Strategic steer on nuclear: The Government issued a Strategic Steer, instructing the civil, defence, and decommissioning nuclear sectors to accelerate safe, efficient delivery of nuclear developments. One confirmed development is the site for the country’s first small modular nuclear reactors in Wales. The Green Financing Framework has been updated to include nuclear power as eligible for funding through green gilts and Green Savings Bonds. An implementation plan in response to the Nuclear Regulatory Taskforce’s final report is expected within the next three months, offering more detail on the Government’s approach to reducing regulatory barriers to nuclear rollout.
• Green levies cut to reduce household bills: The Government is set to lower household energy bills by cutting green levies, including measures such as scrapping the Energy Company Obligation (ECO) scheme and partially paying for the Renewables Obligation (RO) scheme An additional £1.5 billion in funding for the Warm Homes Plan was announced, to cover the costs associated with scrapping ECO (total cost of which was around £1.7 billion). The changes announced will not affect industrial energy bills, despite a group of UK manufacturers, investors and climate groups calling for the Chancellor to remove policy costs from industrial bills in an open letter back in May 2025. The Budget did however state that the Government “recently confirmed” an increase in the level of relief for certain industrial users from electricity network charges. From 2027, the British Industrial Competitiveness Scheme (BICS) is predicted to cut electricity costs for affected businesses by £35-40 per megawatt hour.
• Rebalancing gas and electricity: The Government announced its intention to rebalance the cost of electricity, compared to gas, stating: “The government is committed to doing more to reduce electricity costs for all households and improve the price of electricity relative to gas. ... The government will set out how it intends to deliver this through the Warm Homes Plan.” The Government further contextualised this within their vision of reducing the UK’s dependency on fossil fuels as part of the energy transition: “The government is focused on bringing down energy bills for households and businesses, while securing the necessary infrastructure investment to build a resilient energy system and reduce the UK's dependence on imported fossil fuels.
• EVs – a mixed message: While announcing up to £2 billion in EV transition support, the UK government also introduced the EV Excise Duty (eVED) – a new charge set to drive up the overall cost of owning an EV/PHEV. From April 2028, drivers of EVs will pay 3p per mile and PHEV drivers 1.5p, in addition to standard Vehicle Excise Duty (VED) – costing the average driver an additional £255 a year. HM Treasury has launched an open consultation on the introduction of eVED, which will close in March 2026. Office for Budget Responsibility (OBR) estimates suggest eVED is likely to reduce sales of electric vehicles, with forecasters predicting 440,000 fewer EVs sold by the end the 2030-31. The same report finds that new support for EV buyers and manufacturers also announced in the Budget could help offset some of this impact. Support measures include a boost to the electric car grant; an additional £100 million allocated to EV charging infrastructure; and a 10-year 100% business-rates relief for eligible EV chargepoints. The R&D Drive35 programme has been extended, with a further £1.5 billion allocated up to 2035. Cuts to public charging prices were not announced, despite industry calls, though a consultation on changes to permitted development rights for EV charging was announced.
• AI Growth Zones boosted: Three more AI Growth Zones were confirmed alongside energy and planning reforms to accelerate AI infrastructure across the UK, including the rollout of the Made Smarter Professional Business Services model with Mayoral Authorities in 2026. Targeted support for industrial sectors – including a call for evidence on tax support for entrepreneurs and a policy paper on Entrepreneurship in the UK – has been welcomed, but with notes of caution. The UK’s technology trade association, TechUK, finds “[support] is not as extensive as we would have hoped.”

Additional reading

For NEDs interested in more in-depth research relating to the recent Budget and UK economic policy, there are a range of resources available, including:

• The House of Commons Library has shared a Background briefing for this year’s Budget, providing a more detailed overview of the UK’s economic situation and the public finances.
• The Office for Budget Responsibility’s Economic and fiscal outlook report provides in-depth analysis of the Budget and economic forecasts.
• The Institute for Fiscal Studies has also published a collection of resources on the Autumn Budget 2025.
• The Institute for Government’s Ministers Reflect report offers insights on the role of the Treasury in safeguarding public finances, and the reforms needed, with a particular focus on how Treasury policymaking impacts UK budgets.
• Our Quarterly Policy Briefing covering essential need-to-knows for NEDs in terms of emerging policy and regulatory developments announced throughout October and November 2025 - coming soon.