Baroness McGregor-Smith

Instability in the Middle East has shown that Britain’s reliance on international fossil fuel markets leaves families and businesses exposed to volatile gas prices. Levies play an important role in getting the country the clean power we need to protect consumers from this volatility.

The scale of future levies will depend on future policy decisions. The transfer of 75% of domestic Renewables Obligation costs to public expenditure is a significant step towards rebalancing levies away from electricity as part of the actions we took at the Budget, which have taken an average £150 of costs off household energy bills and are now factored into bills for the years to come.

The government will continue to explore ways to lower energy bills for consumers and reduce barriers for consumers to adopt clean technologies. Any further changes will only be done in a way which is fair to consumers.

The Renewables Obligation, Feed-in Tariff scheme, CfDs, Green Gas Levy and Nuclear RAB fund investment into home grown clean energy and account for 5% of the current price cap for a typical dual-fuel household.

Independent research that confirms that renewables can drive down electricity prices, already having reduced wholesale electricity prices by up to a quarter - or around £25/MWh - in 2024.

Over this parliament, we are working relentlessly to translate the much cheaper wholesale costs of clean power into lower bills for consumers: the transfer of the RO costs to public expenditure is a significant step towards rebalancing levies away from electricity.

The actions we took at the Budget, which has taken an average £150 of costs off energy bills, is now factored into bills for the years to come.

The North Sea Transition Authority’s latest production projections, published in February 2026, indicate that the UK Continental Shelf could produce around 2.2 billion barrels of oil (bnbbl) between 2026 and 2050.

This is equivalent to around five years of UK oil consumption, based on final consumption of petroleum products in 2024. 80-90% of UK crude is exported to be refined abroad, as UK refineries are not set up to process its particular chemical characteristics.

The NSTA’s October 2025 reserves and resources report estimates around 2.0 bnbbl remaining in technically and commercially viable oil reserves.

The Office for Budget Responsibility (OBR) produces its forecasts independently and is responsible for the assumptions underpinning them.

The OBR’s March forecast incorporates the impacts of government policies announced to date, including impacts on the supply side of the economy, where these meet relevant OBR criteria.

The government is committed to going further to deliver higher growth in the long term.

We have set out a strategy centred on economic stability, boosting public and private investment, and supply-side reform to raise productivity. This includes reforms such as the Planning and Infrastructure Act, the Industrial Strategy, pensions reforms to unlock investment, and the Growth and Skills Levy.

In her 2026 Mais Lecture, the Chancellor also set out three further priorities for raising the UK's long-term growth potential: empowering regional growth, embracing AI and innovation, and establishing a closer relationship with the European Union.

The Office for Budget Responsibility’s Fiscal Risks and Sustainability Report (FRS) 2026 confirms the need to boost growth and maintain sustainable public finances. A written ministerial statement (HLWS199) was published on 7 July alongside the publication of the FRS, setting out the actions the government is taking to reduce the deficit and ensure long-term sustainability.^[1]

^[1] https://questions-statements.parliament.uk/written-statements/detail/2026-07-07/hlws199 UK Parliament, 7 July 2026.

The Office for Budget Responsibility produces its forecasts independently and is responsible for the assumptions underpinning them.

The Government is committed to increasing the UK's long-term growth potential.

The Government’s strategy to boost growth and improve productivity has been guided by three principles: restoring economic stability, increasing investment, and reforming the economy to remove barriers to growth.

We have made significant progress, including through implementing the Planning and Infrastructure Act and are backing businesses by delivering the modern Industrial Strategy. We have also introduced reforms to unlock private sector investment, including through legislative changes to the pensions system, and to strengthen the UK's skills base, such as by introducing the Growth and Skills Levy.

Last year, RTI-based productivity growth was 2.2 per cent, the fastest calendar year rate outside the pandemic in more than a decade. Whole economy investment has risen to 5.6% above its level at the start of this Parliament.

In the 2026 Mais Lecture, the Chancellor set out how the Government is going even further on this agenda with three big choices: empowering regional growth, embracing AI & innovation, and establishing a closer relationship with the EU.

The Office for Budget Responsibility produces its forecasts independently and is responsible for the assumptions underpinning them.

The Government is committed to increasing the UK's long-term growth potential.

The Government’s strategy to boost growth and improve productivity has been guided by three principles: restoring economic stability, increasing investment, and reforming the economy to remove barriers to growth.

We have made significant progress, including through implementing the Planning and Infrastructure Act and are backing businesses by delivering the modern Industrial Strategy. We have also introduced reforms to unlock private sector investment, including through legislative changes to the pensions system, and to strengthen the UK's skills base, such as by introducing the Growth and Skills Levy.

Last year, RTI-based productivity growth was 2.2 per cent, the fastest calendar year rate outside the pandemic in more than a decade. Whole economy investment has risen to 5.6% above its level at the start of this Parliament.

In the 2026 Mais Lecture, the Chancellor set out how the Government is going even further on this agenda with three big choices: empowering regional growth, embracing AI & innovation, and establishing a closer relationship with the EU.

The Office for Budget Responsibility produces its forecasts independently and is responsible for the assumptions underpinning them.

The Government is committed to increasing the UK's long-term growth potential.

The Government’s strategy to boost growth and improve productivity has been guided by three principles: restoring economic stability, increasing investment, and reforming the economy to remove barriers to growth.

We have made significant progress, including through implementing the Planning and Infrastructure Act and are backing businesses by delivering the modern Industrial Strategy. We have also introduced reforms to unlock private sector investment, including through legislative changes to the pensions system, and to strengthen the UK's skills base, such as by introducing the Growth and Skills Levy.

Last year, RTI-based productivity growth was 2.2 per cent, the fastest calendar year rate outside the pandemic in more than a decade. Whole economy investment has risen to 5.6% above its level at the start of this Parliament.

In the 2026 Mais Lecture, the Chancellor set out how the Government is going even further on this agenda with three big choices: empowering regional growth, embracing AI & innovation, and establishing a closer relationship with the EU.