5 days ago
Scrap net zero costs from energy bills, bosses urge Miliband
Bosses have urged Ed Miliband to scrap net zero costs from energy bills as Britain's businesses suffer the highest electricity prices in the world.
Rain Newton-Smith, the director general of the Confederation for British Industry (CBI), will warn in a speech that the levies act as 'an anchor' on the UK's ambition as businesses also contend with high taxes and labour costs.
The plea from the head of Britain's biggest lobby group comes ahead of the Government's publication of its long-awaited industrial strategy.
In a speech at the trade body's national business dinner on Thursday, Ms Newton Smith will say: 'Bringing more renewables too fast on to the grid without storage can push electricity prices up. And the cost of building the network is immense. That is being felt by bill-payers across the country.
'But UK firms cannot carry their part of that without hitting our ability to compete. That's why we're calling on government to remove policy costs from electricity bills.'
British companies pay the highest electricity prices of anywhere in the developed world, according to government figures.
The cost of power for industrial businesses is now about 50pc more expensive than in Germany and France, and four times as expensive as in the US.
Businesses have blamed green levies for contributing to the growing cost of bills, which have been imposed to help meet Mr Miliband's target of decarbonising the electricity grid by 2030.
Sir Jim Ratcliffe, the chief executive of Ineos, has previously warned that soaring energy costs and the race to hit net zero targets has put the UK's multibillion-pound chemicals industry at risk of 'extinction'.
Earlier this year, Ineos shut down a synthetic ethanol centre at Grangemouth in Falkirk, Scotland, resulting in 80 job losses. The chemicals company said that high energy costs in the UK meant the plant was losing money.
Ms Newton Smith will add that survey data from the CBI showed that almost 90pc of UK businesses had reported an increase in their energy bills over the past three years.
The trade body also found that four in 10 businesses surveyed said they were cutting back on investment owing to the high costs of energy.
Ms Newton Smith will say: 'Nowhere is that more urgent than our energy-intensive industries. From metals to chemicals, these are bedrock industries. Foundations of our economic security. But right now they are bearing the heaviest load. One minerals firm told us their UK energy bill is up to 450pc higher than in the US.'
The CBI's push to scrap net zero levies marks a shift in tone from Ms Newton Smith. The CBI boss is known for her green credentials and previously worked at Barclays where she was responsible for the bank's environmental and sustainability policies.
Her speech comes as ministers are preparing to unveil their industrial strategy for Britain, with Sir Keir Starmer and Rachel Reeves, the Chancellor, under pressure to help businesses with their energy bills.
Ms Newton Smith's call to scrap net zero costs from energy bills comes after she met with the Chancellor on Tuesday to make a last ditch plea for removal of the levy ahead of the publication of the Government's industrial strategy.
The CBI boss will argue there is an urgent need for the UK to achieve energy competitiveness in order to deliver economic security.
She will say: '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.'
Scrapping net zero costs from bills would instantly slash the electricity price paid by manufacturers by about a quarter, according to analysis by Make UK.
However, the proposal to remove net zero levies is expensive and is estimated to cost the Treasury £3.8bn.
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