UK general election 2024: pledges relevant to energy sector businesses

Be it Labour’s plan to establish Great British (GB) Energy, or the Conservatives’ plans to scale up nuclear power, policies detailed in party manifestos may have a direct and significant impact on the sector if introduced.

This article offers a side-by-side view of some of the main UK parties’ key pledges of relevance to the energy sector.

Renewables

If re-elected, the Conservative Party have committed to trebling offshore wind capacity as well as ensuring democratic consent for onshore wind projects to further boost renewable energy development across the UK. The party has also promised contract payments to support offshore wind energy firms investing in manufacturing in the most disadvantaged placed in the UK.

Read more of our analysis of the parties' 2024 manifesto pledges

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Rishi Sunak’s party have also outlined plans to build two carbon capture and storage clusters, as well as supporting solar power developments in the right places. The manifesto includes plans to invest £1.1 billion into the green industries growth accelerator.

If Labour win, they have set out plans to introduce GB Energy – a publicly owned clean power company, to help cut bills and boost energy security, paid for by windfall tax on oil and gas. Labour is also promising to introduce a National Wealth Fund to support investment in clean energy as well as working with the private sector to double onshore wind, triple solar power, and quadruple offshore wind by 2030.

Keir Starmer’s manifesto promises investment in carbon capture and storage, hydrogen and marine energy. They have also pledged to reward clean energy developers with a ‘British jobs’ bonus, allocating £500 million per year from 2026. By doing this, the party aims to incentivise firms which offer good jobs, terms and conditions and build their manufacturing supply chains in industrial heartlands, coastal areas, and energy communities.

The Liberal Democrats have said they would remove restrictions on new solar and wind power, while supporting investment and innovation in tidal and wave power. They also said they would work with European countries to build a sustainable supply chain for renewable energy technology as well as empowering local authorities across the UK to develop local renewable electricity generation and storage strategies.

The Lib Dems’ manifesto also guarantees that community benefit funds would receive a fair share of wealth generated by local renewable infrastructure.

Oil and gas, fracking, coal

The Conservatives have set out plans to develop new gas power stations to back up renewables, maintaining investment allowances for the oil and gas sector if re-elected. They would also legislate to ensure annual licencing rounds for oil and gas production from the North Sea as well as retaining moratorium on fracking.

The Labour Party’s manifesto demonstrates a different approach. Labour have committed to continue the oil and gas decline by not permitting any new licences to explore new oil and gas fields, no new coal licences, and a ban on fracking for good However, the party also recognises the ongoing role of oil and gas in the energy mix, setting out a phased transition in the North Sea for workers.

Labour would also close loopholes in the windfall tax on oil and gas companies, while extending the sunset clause in the energy profit levy until the end of next parliament, increasing the rate of the levy by three percentage points. A promise to retain the energy security investment mechanism is also included, alongside maintaining a strategic reserve of gas power stations to guarantee security of supply.

The Lib Dems have also shown a commitment to greener energy by promising to end fossil fuel subsides, maintaining a ban on fracking, and introducing a ban on new coal mines. They recognise the impact on workers, setting out plans to ensure ‘just transition’ for people working in the oil and gas industry if elected as well as supporting the UK regions most impacted by the transition away from oil and gas. The party would also implement a “proper”, one-off windfall tax on the super-profits of oil and gas producers and traders.

Nuclear

In government, the Conservatives have been supportive of nuclear power, considering the energy source as “reliable, resilient, and low-carbon power” essential to meeting 2050 net zero targets. If re-elected, the Conservatives have pledged to continue this support by ensuing the long-term security of the nuclear sector. This includes extending the lifetime of existing plants and ensuring new nuclear power stations play an important role in helping achieve energy security.

Labour’s plans also look to grow the nuclear industry, scaling up nuclear power and approving two new fleets of small modular rectors in the first 100 days of the new parliament. Labour will also halve the time it takes for new nuclear reactors to be approached by allowing regulators to assess projects while designs are being finalised, setting out plans for a new power plant as well as assistance for existing projects.

Grid infrastructure

During their time in government, the Conservatives have sought to accelerate construction of energy infrastructure. This includes plans set out in an independent review, the Winser Review, which would be implemented to ensure networks are able to buy forwardwith confidence. They would also work to cut waiting times to get a grid connection.

Labour would work with industry to upgrade national transmission infrastructure and deploy more distributed production capacity through a local power plan.

Reducing access costs for grid connection for community and decentralised energy forms a key part of the Liberal Democrats’ plans, as well as a pledge to reform the energy network to permit local energy grids. They would also build more interconnectors between the UK and other countries to guarantee security of supply, and support new electric vehicle charging points.

Net zero

The Conservatives have highlighted their commitment to net zero emissions by 2050. They said they would guarantee a vote in the next parliament on the next stage of the net zero pathway. They would also cut the cost of net zero for consumers by guaranteeing no new green levies or charges, including road pricing schemes or frequent flyer levy.

Labour said they will support the introduction of a carbon border adjustment mechanism.

The Liberal Democrats would set out a clear and stable roadmap to net zero, including providing more advice to companies on cutting emissions, and implementing the carbon border adjustment mechanism for high-emission products to help the UK reach its 2050 targets. They would also further support carbon capture and storage, new low-carbon processes for cement and steel production, and the development of regional industrial clusters for zero-carbon innovation.

Energy consumers

Energy prices have soared in recent years, with many consumers struggling with the high costs. The Conservatives have pledged to maintain the energy price cap to help with this, evolving the price cap to give the regulator the necessary powers to protect consumers. They would also review and reform standing charges to keep them as low as possible, introduce more efficient local markets for electricity, and give households the choice of smart energy tariffs.

Labour would also work with the energy regulator to reduce standing charges, and thus bring consumer costs down. They would strengthen energy regulation to ensure it can hold companies to account for wrongdoing in the sector.

The Liberal Democrats pledge to launch an emergency home energy upgrade programme as well as other incentives for installing heat pumps. They would also require all new homes and non-domestic buildings to be built to a zero-carbon standard and reintroduce requirements for landlords to upgrade the energy efficiency of their properties to EPC C rating or above by 2028.

Social tariffs for the most vulnerable would also be introduced by the Lib Dems if elected, as well as eliminating regional differences in domestic energy bills and decoupling electricity prices from the wholesale gas price.   

Tax and other headline commitments

General business

Labour said they would introduce a new UK industrial strategy and re-establish an Industrial Strategy Council – the latter being a pledge also made by the Liberal Democrats, which said they would put the body on a statutory footing. Labour has also pledged to publish a roadmap for business taxation for the next parliament.

The Conservatives said they would promote digital invoicing and improve enforcement of the Prompt Payment Code.

Corporation tax

Labour have pledged to cap corporation tax at the current level of 25%. The Conservatives have said they would not increase corporation tax either. The Liberal Democrats have said that they would make the case for increasing the global minimum rate of corporation tax to 21%.

VAT

Labour have pledged no increase to VAT. The Conservatives said they would keep the VAT threshold under review. The Liberal Democrats said they would cut the VAT rate applicable to public charging of electric vehicles to 5%.

Income tax and National Insurance

Labour have said that they would not impose increases to National Insurance or the basic, higher or additional rates of income tax. The Conservatives have pledged to abolish the main rate of National Insurance entirely by the end of the next parliament. The Liberal Democrats said they would raise the tax-free personal allowance, which applies before income tax is levied, when public finances allow.

Business rates

Labour have said they will replace the business rates system. They have also pledged to end the VAT exemption and business rates relief for private schools.

The Conservatives have promised to enable councils to retain all business rates growth within a defined zone for 25 years. They have also pledged to increase the multiplier on distribution warehouses that support online shopping over time.

The Liberal Democrats have said they would abolish business rates and replace them with a commercial landowner levy.

Tax reliefs

Labour have promised to retain a permanent full expensing system for capital investment and the annual investment allowance for small business.

The Conservatives have said they would lift the employee threshold, allowing more companies to be considered medium-sized and benefit from associated tax reliefs. In line with an announcement set out by chancellor Jeremy Hunt in his March Budget, the Conservatives have also committed to extending the ‘full expensing’ policy to leased assets.

The Liberal Democrats have pledged to expand rural fuel duty relief.

Other tax pledges

Labour have said that they would abolish the non-domiciled tax status, if elected to government.

The Conservatives have said they would not impose any increase to the rate of capital gains tax.

The Liberal Democrats have pledged to reform capital gains tax, increase the UK’s digital services tax rate from 2% to 6%, and restore the bank surcharge and bank levy revenues to 2016 levels in real terms.

Employment, skills and immigration

Labour have pledged to establish a youth guarantee, where all 18- to 21-year-olds would be given access to training, an apprenticeship, or support to find work,

Labour said they would also implement what a ‘new deal for working people’, in full. This, they said, would include banning zero hours contracts; ending fire and rehire; and ensuring workers have basic rights to parental leave, sick pay, and protection from unfair dismissal, from ‘day one’ in a job.

Labour have also said they will establish a flexible growth and skills levy, change the remit of the independent Low Pay Commission, and reform the points-based immigration system.

The Conservatives have pledged to create 100,000 more apprenticeships in England every year by the end of the next parliament.

They have also committed to maintain the national living wage in each year of the next parliament at two-thirds of median earning.

The Liberal Democrats have said that they would establish a new Worker Protection Enforcement Authority. They also said they would fix the work visa system and exempt NHS and care staff from the immigration skills charge.

Their other plans include to improve the quality of vocational education, including skills for entrepreneurship and self-employment; replace the apprenticeship levy with a broader skills and training levy; and create new lifelong skills grants for adults to spend on education and training throughout their lives.