The Labour government is re-evaluating its energy policy, with Chancellor John Healey stating a new priority to reduce UK energy costs to be in line with Europe. Healey announced this shift during his Budget speech, emphasising that cheaper energy is now the primary focus, with clean power central to this goal.
This policy adjustment comes as Prime Minister Andy Burnham faces decisions balancing high industrial energy costs with Labour's net zero commitments. Burnham is scheduled to attend the COP 31 climate summit in Turkey this week, followed by a trip to Dublin to seek an energy market deal with European leaders.
Energy Secretary Miatta Fahnbulleh has suggested that the party's ambition to remove almost all fossil fuels from the power supply by 2030 may be discarded if the UK's "affordability challenge" is not first addressed. Ministers, including Fahnbulleh and Healey, are reportedly debating the approval of the Rosebank oil field project, which raises questions about consistency with a manifesto promise against new oil and gas licences. Additionally, Louise Haigh is expected to reduce electric vehicle sales targets to assist carmakers.
The government has proposed a policy to offer approximately 10,000 energy-intensive businesses a discount of up to 25 per cent on electricity bills from April, funded by aligning UK and EU carbon markets and exempting businesses from existing levies.