The Autumn Budget, published by HM Treasury on 30 October 2024, sets out higher planned spending for the Department for Energy Security and Net Zero and a set of tax changes affecting energy and motoring. Plans for Energy Security and Net Zero, on the departmental expenditure limit excluding depreciation, rise from a £6.4 billion outturn in 2023-24 to £9.0 billion in 2024-25 and £10.3 billion in 2025-261.
The Budget also states that public sector net investment will average 2.5% of GDP over the next five years, supported by £100 billion of additional capital investment, and that total departmental capital spending reaches £131 billion in 2025-261. It lists construction costs for expected on-balance sheet carbon capture, usage and storage and hydrogen projects as a departmental item, subject to decision1. The Budget also refers to "launching Great British Energy"1.
On oil and gas taxation, the Budget increases the rate of the Energy Profits Levy from 35% to 38%, removes the 29% investment allowance and extends the levy until 31 March 2030, while 100% first-year allowances in the levy remain1. It adds that the government will consult in early 2025 on how the oil and gas tax regime should respond to price shocks once the levy ends in 20301.
For households, the Budget freezes fuel duty and extends the temporary 5p cut for one year, at a cost of £3 billion next year, which it says will save the average car driver £59 in 2025-261. It also states that the government is strengthening incentives to purchase electric vehicles by widening the differentials in Vehicle Excise Duty First Year Rates between EVs and hybrids or internal combustion engine cars, maintaining EV incentives in the Company Car Tax regime, and extending 100% First Year Allowances for zero emission cars and EV chargepoints for a further year1. Separately, the Budget provides £1 billion, including Barnett consequentials, to extend the Household Support Fund and Discretionary Housing Payments in 2025-26, which will be used by local authorities to address immediate hardship and crisis1.
"The government is increasing the rate of the Energy Profits Levy (EPL) from 35% to 38%"
| Measure | Detail |
|---|---|
| Energy Security and Net Zero DEL, excluding depreciation | £6.4bn (2023-24), £9.0bn (2024-25), £10.3bn (2025-26) |
| Energy Profits Levy rate | 35% to 38% |
| Energy Profits Levy investment allowance | 29% allowance removed |
| Energy Profits Levy end date | Extended until 31 March 2030 |
| Fuel duty | Freeze and temporary 5p cut extended for one year |
| Household Support Fund and Discretionary Housing Payments | £1 billion, including Barnett, in 2025-26 |
Why it matters for households
The departmental figures are plans for government spending rather than direct payments to homes, so they do not by themselves change a household bill. What they indicate is the scale of public money directed at energy security and net zero over the next two years, including capital spending on projects such as carbon capture and hydrogen, which the Budget lists as subject to decision1. For a household considering its own energy independence, the more immediate items are the fuel duty freeze, which the Budget says saves the average car driver £59 in 2025-26, and the EV measures, which affect the upfront and company car tax treatment of electric vehicles rather than domestic heating or electricity1. The £1 billion for the Household Support Fund and Discretionary Housing Payments is crisis support administered by local authorities, not a change to standing energy costs1. The Budget does not set out changes to household energy bills, tariffs or appliance energy labels and ecodesign rules in the passages cited here, and no such changes have been reported in these sources.
What happens next
The Budget states that the increase in the rate of employer National Insurance contributions and the reduction in the per-employee threshold apply from 6 April 20251. The government will consult in early 2025 on how the oil and gas tax regime should respond to price shocks once the Energy Profits Levy ends in 20301. The Budget was ordered by the House of Commons to be printed on 30 October 20241. Further detail on regulation and policy affecting household energy has not been reported in these sources.