UK must tackle energy bills as firms face £24bn in extra costs
Britain must address soaring energy tariffs as firms struggle under the weight of crippling power bills on top of tax and wage hikes costing them an extra £24 billion a year, the boss of the CBI is set to warn.
Rain Newton-Smith, chief executive of the business group, will tell business leaders and politicians at the CBI's business dinner on Thursday that sky-high energy costs are an 'anchor on our ambition'.
At the event in London, she will call on the Government to come up with a 'serious plan' to cut energy costs and invest in energy security to help make the UK and businesses more competitive.
The CBI said almost 90% of British businesses have seen their energy bills rise over the past three years, with a third seeing them rocket by more than 50%.
Four in 10 firms are reducing investment as a result, according to the group.
Higher energy bills come on top of significant increases in staff costs, with the CBI estimating the recent rise in national insurance contributions (NICs) and past three minimum wage hikes since 2023-24 is costing companies an extra £24 billion each year.
Ms Newton-Smith will say: 'Business is now straining under £24 billion in extra costs per year.
'That's more than the cost of Crossrail. More than the Home Office budget – on business, every year.'
She will add: 'With costs running so high, there is one issue we absolutely must tackle.
'Without it, any industrial strategy, any serious plan for economic security will fall flat on its face. Energy.'
She will say the rising cost of energy 'isn't just a cost issue'.
'It's a jobs issue. An investment issue. A security issue.
'Because how can UK business compete with one hand tied behind its back – and the other straining to keep the lights on?
'This is an anchor on our ambition. A crack in our economic security. And it must be fixed.'
Britain is becoming less competitive for business and industry due to expensive energy, with firms finding it 'harder and harder to stay in the UK' when power is far cheaper abroad, according to the CBI.
Ms Newton-Smith will warn UK firms 'pay among the highest electricity bills in the world – 50% more than France or Germany, four times more than the US and Canada'.
The CBI is making a plea to the Government to remove policy costs from electricity bills, but it also wants it to focus on low-carbon energy to help achieve economic security.
Its recent economic report showed the UK net zero economy grew 10% and supported 900,000 jobs.
Ms Newton-Smith will say: 'If economic security is our destination, then make no mistake: affordable, reliable, low-carbon energy is the road that gets us there,
'What we need now is a serious plan alongside the industrial strategy: to cut energy costs, to manage the shift from fossil fuels, to boost efficiency, storage and system flexibility.
'This Government has already shown it can put prosperity over politics on the world stage. Well now it must do the same for energy at home.
'Because this isn't about culture wars. It's about common sense.'
A Government spokesperson said: 'Through our sprint to clean power, we will get off the rollercoaster of fossil fuel markets – protecting business and household finances with clean, homegrown energy that we control.
'We are already bringing energy costs for key UK industries closer in line with other major economies through the British industry supercharger – saving businesses £5 billion over the next 10 years.'
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