Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what fiscal steps his Department is taking to encourage investment in the UK’s energy sector.

The Government is committed to encouraging investment in the UK energy sector. Investment has been incentivised through a range of levers:

o The CfD scheme has been hugely successful in driving the deployment of renewable energy while rapidly reducing costs. Allocation round 4 of the CfD, which opened in December 2021, was the biggest ever and will deliver a record capacity of almost 11GW of clean energy. This is enough to power around 12 million British homes with clean, affordable, homegrown energy, helping to reduce our exposure to volatile global prices.

o The new 80% investment allowance in Energy Profits Levy will mean businesses will overall get a 91p tax saving for every £1 they invest – this will encourage the oil and gas sector to reinvest their profits to support the economy, jobs, and the UK’s energy security.

o The £120m Future Nuclear Enabling Fund will support the development of a nuclear project pipeline as the UK strives to meet net zero by 2050.

As well as fiscal measures, the Government is committed to making the UK energy sector attractive to investors by reducing unnecessary burdens and speeding up the delivery of much-needed infrastructure. The Growth Plan sets out sector specific changes such as:

o Prioritising the delivery of National Policy Statements for energy, water resources and national networks, and of a cross-government action plan for reform of the Nationally Significant Infrastructure planning system.

o Bringing onshore wind planning policy in line with other infrastructure to allow it to be deployed more easily in England.

These changes are a vital means of driving the UK’s economic growth, increasing long-term energy security, and delivering Net Zero.