Key facts
- Healey said the government priority is "first and foremost cheaper energy, with clean power key to achieving this."
- Energy secretary Miatta Fahnbulleh approved the Jackdaw gas field project, the report said.
- Equinor is awaiting a decision on whether the Rosebank oil field will get the go-ahead, the report said.
- Louise Haigh is expected to dial down electric vehicle sales targets to help carmakers, the report said.
- The government said about 10,000 energy-intensive businesses would get a discount of up to 25 per cent from April on electricity bills.
- Government analysis and international agency data suggest UK firms pay four times as much for electricity as US companies, the report said.
Chancellor John Healey used his Budget speech to set what the report described as a new course on energy, saying the government's priority is "first and foremost cheaper energy, with clean power key to achieving this." The report, published on November 12, 2026, said the lines raised eyebrows in Westminster and marked a shift from previous governments on net zero.
The test of the commitment came when energy secretary Miatta Fahnbulleh approved the Jackdaw gas field project, the report said. Equinor is awaiting a decision on whether the Rosebank oil field will be approved, with ministers including Fahnbulleh and Healey reportedly divided over allowing more fossil fuel drilling while the manifesto promises no new licences for oil and gas fields. Labour backbenchers are lining up to publicly condemn Rosebank, according to the report.
Fahnbulleh has suggested the party's ambition to eliminate almost all fossil fuels from power supply by 2030 would be dropped if the UK's affordability challenge was not solved first, the report said. Louise Haigh, who the report says enforces the prime minister's agenda in government, is expected to dial down electric vehicle sales targets to help carmakers.
The government has promoted a policy to give about 10,000 energy-intensive businesses a discount of up to 25 per cent from April on electricity bills, with additional funding from aligning UK and EU carbon markets and exempting businesses from existing levies, according to the government. Data from government analysis and international agencies cited by the report suggests British firms pay four times as much for electricity as American companies and about twice as much as European counterparts.
The Institute for Fiscal Policy found taxes and policy costs such as the climate change levy made up over a third of industrial electricity costs for businesses that are not energy-intensive, and suggested spreading decarbonisation costs across the economy or removing fixed costs from the unit price. A cross-party group of MPs on the Energy Security and Net Zero Committee led by Labour's Bill Esterson said all net zero costs should be stripped off electricity prices.
Research by Transira Energy and Onward, backed by the Conservatives, suggested abandoning net zero regulations and taxes could save households as much as £540 a year between 2030 and 2050, while conceding the economy could be left more exposed to international gas price shocks. The Office for Budget Responsibility warned in its 2025 fiscal risks report that in a scenario of global temperatures rising by three degrees Celsius, climate change damage could contribute around three-fifths of the addition to public sector debt by 2074.
The report said higher international energy prices caused by the Iran war have raised the stakes of diplomacy across government, and that the prime minister travels on Thursday to the COP 31 climate summit in Turkey before seeking an energy market deal with European leaders in Dublin.