Chancellor needs to unlock greater sustainable investment through new incentives for businesses hit by Electricity Generator Levy

The Chancellor must grasp the opportunity to unlock far greater levels of sustainable investment during the Autumn Statement, through new investment allowances, VAT, and regulatory reforms.

Central to this should be implementing a £10m ‘investment allowance’ for firms hit by the Electricity Generator Levy (EGL). The relief should be at least equal to the decarbonisation allowances that feature under the Energy Profits Levy.

Why are we offering relief to fossil fuel companies that pay windfall taxes, but not renewable energy producers hit by windfall levies?

Such a move would encourage greater domestic investment in renewable projects, making the UK a more attractive proposition for outside investors.

As the UK lags behind many of its European counterparts in its adoption of electric vehicles (EVs), the Chancellor must also consider reducing VAT on EVs to 5%, to boost consumer demand and outside investment. With charging stations still far below the numbers needed, the government should demonstrate greater commitment to other types of low carbon vehicles to propel the transition towards a more sustainable mode of driving.

The financial sector remains key to reaching net zero. Without a robust and clear regulatory framework aligned with EU taxonomy, firms may continue to deprioritise green investments and find ways to creatively greenwash where possible. The UK once led the way on green regulation and the Chancellor should provide the necessary reform to put us back on that path.

For more insights on potential measures from the Chancellor in his Autumn Statement, view our full Wishlist article.