Scrap net-zero subsidies

Policy scope

Reform pledges to scrap net-zero policies it says drive bills higher and to expand domestic energy production. The 2024 Contract claimed GBP 30bn annual savings.

• Current page pledges cheaper energy.
• Contract claimed GBP 30bn annual saving.
• Existing contracts may limit savings.

Core trade-offs

Some bills or public costs may fall if schemes are cancelled. Investment certainty, emissions, supply-chain jobs and fossil-price exposure are likely to worsen.

• Consumers may gain short-run bill relief.
• Green investors and supply chains lose.
• Climate and energy-risk costs rise.

Illustrative fiscal impact

-GBP 12.0bn to +GBP 10.0bn. Central estimate: -GBP 3.0bn.

• Positive numbers mean public-finance pressure; negative numbers mean Exchequer savings.
• GBP 30bn claim is the main scale marker.
• Gross costs and receipt offsets are separated in methodology.
• Behaviour and pass-through widen the range.
• This is not an official costing.

Economic impact by 2027-28

• Jobs: Fossil sectors may gain; renewables, retrofit and grid-investment jobs likely lose.
• Wages: No broad wage gain; sectoral pay shifts with investment flows.
• Prices: Bills may fall short term if levies are cut, but gas-price exposure increases.
• GDP / productivity: Likely negative long term through weaker investment certainty and climate-risk exposure.

Assessment

There may be some near-term bill or fiscal savings, but the GBP 30bn claim should not be treated as spendable cash without a contract-by-contract schedule. The likely long-run economic impact is negative if the policy deters energy investment and raises fossil-price exposure.

Confidence: Low. Reform's pledge is broad, while actual savings depend on levy design, contracts and compensation liabilities.

Main risks

• Contract liabilities: Existing renewable contracts may require compensation or keep costs in place.
• Investment shock: Abrupt reversal can raise the cost of capital for energy infrastructure.
• Fossil exposure: More reliance on gas and oil leaves households exposed to global price spikes.

Safeguards

• Publish a scheme-by-scheme repeal schedule.
• Separate bill levies from Exchequer spending.
• Keep grid and efficiency investments with positive paybacks.

Academic evidence

UK government evidence

Sources

• PolicyLens illustrative scenario methodology: Scrap net-zero subsidies Internal - PolicyLens, 2026
• The Macroeconomic Impact of Europe's Carbon Taxes Academic article - Metcalf and Stock, American Economic Journal: Macroeconomics, 2020
• The Economics of Climate Change: The Stern Review Academic review - Stern and review team, HM Treasury and Cambridge University Press, 2006
• Energy price cap explained Regulator data - Ofgem, 2026
• Our Contract with You Party policy document - Reform UK, 2024
• Carbon Taxes and CO2 Emissions: Sweden as a Case Study Academic article - Andersson, American Economic Journal: Economic Policy, 2019
• Our Policies Party policy source - Reform UK, 2026

Other Reform UK policies

• Raise income-tax thresholds
• Cut household energy taxes
• Cut fuel duty by 20p
• Cut stamp duty below GBP 750,000
• Raise inheritance-tax threshold to GBP 2m
• Cut corporation tax to 15%
• Raise VAT threshold to GBP 150,000
• Abolish IR35 rules