On Wednesday, Chancellor of the Exchequer, Rachael Reeves revealed the details of the Government’s Autumn budget. This is an important plan that lays out how the Government will manage taxation and spending over the coming year.

In this article we will explore some of the environmental impacts the budget will have.

1. Less Money for insulating houses

One of the big announcements made on Wednesday was the scrapping of the Energy Company Obligation (ECO) Scheme. Up to now, ECO has been the UK’s main housing insulation scheme. By improving the insulation in around 15 million homes, the scheme has helped to lower household energy usage, and in turn, saved homes an average of £7,500.

The Government is arguing that by scrapping this scheme, the average household energy bill will be cut by £150, however environmental experts are concerned that it will lead to fewer homes being adequately insulated, leading to increased energy demand and higher costs in the long-term.

1. Fuel Duty stays frozen (for now)

Fuel duty will remain frozen still September 2026, before rising in-line with inflation. This will mark the first time fuel duty has risen since 2010.

The question of fuel duty has been a difficult one for governments to manage. On the one hand, it is hoped that by making fuel more expensive, it can encourage people to transition to using electric vehicles and reduce CO2 emissions, on the other, doing so increases the cost of an essential expense for millions of working people.

1. But electric cars will face a new charge

Somewhat counter-intuitively the government is also introducing a new 3p-a-mile duty on electric cars (1.5 for hybrid cars). Electric Vans, busses and HGV’s will be exempt from this charge.

It is hoped that this new charge will raise £1.9 billion a year by 2031, which will pay for road maintenance. However there are fears that it will discourage people from switching to electric cars, with the OBR estimating that this change could cause electric car sales to fall by as much as 24,000 a year before 2030.

1. A mixed bag for public transport

Reliable and affordable public transport is key to lowering emissions and making the country more environmentally sustainable. The announcements that the £3 cap on bus fares will be extended, along with rail fares being frozen for the first time since the 90’s is a welcome then.

Unfortunately, these plans come alongside a possible rise in taxi prices, as the Government will now move to end a loophole that has up to now allowed some taxis outside London to operate effectively free of VAT. While this change has been welcomed by some representatives of the taxi industry as a means of improving competition, it may mean higher prices for customers.

1. Windfall tax on oil stays

Much to the annoyance of many within the fossil fuel industry, the windfall tax, put in place following Russia’s invasion of Ukraine in 2022, will remain. The tax has hit the North Sea oil industry very hard – as much as 78% of profits have been lost, leading to a significant decline in investment and interest in new oil projects.

While we may welcome this decline initially, there is some reason to be cautious. The UK remains reliant on oil for a variety of important industries, and so there is an argument that maintaining oil operations closer to home may actually emit fewer greenhouse gasses than shipping in oil imports from elsewhere in the world.