Key facts
- UK corporate electricity prices are 45% higher than the G7 average.
- 40% of UK firms have reduced investment due to high energy bills.
- Approximately one-fifth of business electricity costs are policy costs funding net-zero investment.
- The CBI and Energy UK propose shifting policy costs to general taxation or a private Energy Transition Funding Scheme.
- A government discount of roughly 25% for energy-intensive manufacturers will be introduced in April 2027.
- Industry bodies want this discount implemented sooner.
Industry bodies the CBI and Energy UK have urged the UK government, led by Prime Minister Andy Burnham, to reduce green levies on business energy bills and accelerate support for energy-intensive industries. They argue that high electricity prices, which are 45% above the G7 average, are hindering economic activity and investment, with four in 10 firms cutting back on investment to manage spiralling costs.
The joint report, titled a "blueprint for growth," suggests shifting the approximately one-fifth of electricity costs attributed to policy funding net-zero investments into general taxation or a privately financed Energy Transition Funding Scheme. Louise Hellem, chief economist at the CBI, stated that loading these costs onto electricity bills places UK businesses at a disadvantage globally and that reliable, affordable energy is essential.
The blueprint also proposes programs to help companies accelerate electrification and enhance support for energy-intensive sectors. While the government has announced a roughly 25% discount for about 10,000 manufacturers, set to begin in April 2027, business leaders including Andy Haldane, president of the British Chambers of Commerce, alongside the CBI and Energy UK, are calling for this measure to be implemented sooner. Business secretary Peter Kyle affirmed the government's commitment to supporting businesses and ensuring national resilience.