Autumn Budget 2026: what it means for electrical contractors

  Posted by: electime      28th October 2026

Chancellor John Healey’s first Budget scraps gas standing charges, extends VAT relief on household electricity and backs cheaper on-street EV charging. Industry leaders say skills, grid connections and investment certainty will decide whether it delivers

Energy took centre stage in today’s Autumn Budget. However, industry leaders warn that short-term relief on bills must be matched by long-term reform, investment in skills and faster grid connections.

Chancellor John Healey said gas standing charges would be scrapped from 2027 “or as soon as possible after”. VAT will be removed from domestic electricity bills until 1 July 2027, and around 20 million households in council tax bands A to D will receive a £100 Household Energy Payment this winter.

He also promised cheaper, faster grid connections. Healey said that “won’t happen overnight”, and that policy costs would no longer be added to bills through levies. A £2 billion Energy Wealth Fund, announced last week to channel North Sea revenues into clean energy projects, was confirmed in the Budget.

For EV charging, the government will put £100 million over 2027-28 and 2028-29 towards cutting prices at existing local, lower-powered public chargepoints. Support begins in spring 2027. A new taskforce will look at whether drivers without off-street parking could use their home electricity tariff at local chargers. This follows the government-commissioned Cost of Public Electric Vehicle Charging Review, published alongside the Budget.

However, VAT on public charging stays at 20%. The Depot Charging Scheme has also reopened with a further £38 million for chargers for electric trucks, vans and coaches.

For contractors running their own businesses, the main rate first-year allowance on plant and machinery rises from 40% to 50%. Business mileage rates above 10,000 miles rise from 25p to 35p, and the 5p fuel duty cut is extended to July 2027. The National Living Wage will rise by 3.9% to £13.20 an hour from April 2027. The lifetime limit on Business Asset Disposal Relief, used when selling a business, halves from £1 million to £500,000 from April 2027.

A £700 million AI package and a commitment to a more business-friendly visa system for high-skilled workers were also announced.

Charging: ‘the driveway divide’

Oliver Brighton, CFO of chargepoint operator char.gy, said: “For households without driveways, charging is a street-level service, not a motorway stop. Councils already know where residents need chargers. What they need is the freedom and long-term funding certainty to turn local plans into installations at scale.

“Today’s devolution measures are a welcome opportunity to give local authorities greater flexibility over investment. The new funding arrangements could help councils move beyond piecemeal projects and commit to neighbourhood-wide charging programmes, working with private operators to deliver more quickly and efficiently. The measure of progress is whether someone living on a terraced street can reliably plug in close to home.”

Ben Nelmes, CEO of New AutoMotive, said: “It is not fair that people who cannot charge their electric car at home must pay significantly more for their electricity. It is good to see the Chancellor taking steps to allow drivers to use their home electricity tariff at their local charge point. It is vital that this work moves at pace to end Britain’s driveway divide.”

For depot charging, Simon Smith, CEO of Voltempo, said: “This isn’t about asking for more money. It’s about making public investment work harder. Electric trucks can deliver significant savings on running costs, but hauliers can only unlock those benefits if their depots have the power to support them.

“The Depot Charging Scheme is a welcome step, but funding chargers without the infrastructure to run them risks leaving businesses with equipment they cannot use. Government must support the full cost of making depots electric-ready and recognise the reality of grid connection delays. Get that right, and we unlock private investment, cut freight costs and accelerate the shift away from diesel. That’s how you turn a grant into economic growth.”

Tanya Sinclair, CEO of Electric Vehicles UK, said: “The Chancellor has addressed the immediate pressure on household budgets, but the Government cannot claim to be helping motorists with one hand while making the transition to electric harder and more expensive with the other.

“Electric motoring is already helping drivers escape volatile pump prices, and many more could benefit if the Government tackled the policy barriers keeping public charging unnecessarily expensive, particularly for those without driveways. Meanwhile, the Government is considering weakening the ZEV mandate, a move that would undermine the competition and investment needed to bring more affordable electric cars to market. Ministers should be making it easier and cheaper for drivers to switch, not putting new barriers in their way.”

Energy, skills and AI

David Hall, zone president UK & Ireland at Schneider Electric, said: “Putting energy at the centre of the Budget recognises the pressure high energy costs continue to place on UK industry, constraining competitiveness and investment in growth. Removing standing charges, VAT cuts and cheaper EV charging are all important steps – but immediate relief must be matched by long-term reform that brings down the structural cost of energy.

“Making electrification more affordable will remain central to its acceleration up and down the UK. Businesses need the confidence and certainty to invest in the infrastructure and energy management systems that will help them understand consumption, reduce waste and manage demand more effectively.

“The commitment to cheaper clean power, faster grid connections and £2 billion for the new Energy Wealth Fund can help unlock this investment. The test now is whether these reforms deliver reliable, lower-cost energy and stronger resilience for businesses in every part of the country.”

On skills, he said: “The Budget’s focus on industrial growth, energy reform and infrastructure recognises the scale of the UK’s economic opportunity. Delivering it will depend on whether businesses have access to the skills needed to build, operate and maintain increasingly electrified and connected systems.

“Practical, employer-led training, upskilling existing workers and bringing new talent into the sector must remain central. The commitment to a more pro-business, high-skilled visa system is also a positive step, helping employers access specialist talent where it is needed.

“This now needs to be matched by targeted investment in further-education colleges, high-quality apprenticeships and flexible retraining. Working with devolved and local leaders can help employers and training providers respond to the needs of local economies, creating opportunities and removing a fundamental barrier to growth.”

On digitalisation and AI, he added: “The Budget’s £700 million AI package, including additional support for the Sovereign AI Unit and locally led AI adoption, reinforces how much AI is central to the UK’s growth strategy. The opportunity now is to ensure this translates into practical gains to build resilience into British industry.

“By connecting operational data with energy-management and automation systems, manufacturers can identify inefficiencies, improve performance and strengthen resilience. Our research found that 48% of UK industrial leaders see profitability and efficiency as a leading incentive for adopting autonomous technologies, yet only 8% have reached full autonomy.

“Support for AI deployment must therefore sit alongside reliable energy infrastructure and accessible digital-adoption support for smaller firms. Simplifying access to R&D tax reliefs and improving venture-capital schemes can also help innovative businesses invest, scale and turn digital ambition into productivity gains.”

North Sea: ‘visibility of work beyond the next contract’

George Morrison, CEO of offshore engineering firm Aquaterra Energy, called for the Rosebank field to be approved after last week’s go-ahead for Jackdaw. He said: “If the government wants North Sea revenues to help fund the UK’s energy future, its tax policy needs to support the investment that generates them. The Budget’s commitment to the Energy Wealth Fund makes a credible investment environment for the basin all the more important.

“Last week’s approval of Jackdaw recognised the value of domestic production, with the Chancellor confirming in his speech today that it will add an estimated £2.9 billion to the UK economy. The government should now follow through by approving Rosebank. A credible pipeline of projects gives businesses the confidence to develop their workforces and invest in their capabilities. Individual approvals are welcome, but businesses need visibility of work beyond the next contract to commit to long-term investment in the UK.”