Over 120 organisations have signed a letter to the government, coordinated by E3G and Energy UK, warning that high electricity costs could lead to business closures, job losses, and worsen cost of living challenges. The letter urges the government to reduce taxes on electricity in the upcoming Autumn Budget.
The organisations highlight that the UK's energy costs are among the highest in developed nations, having increased by 70% since 2021. This has contributed to household energy debt nearing £7 billion and has led over 40% of British businesses to cut investment.
The signatories argue that while gas prices have risen due to the conflict in the Middle East, non-fuel costs, including government levies, also significantly contribute to high energy bills. They are calling for the government to remove these taxes from electricity bills.
The letter suggests that moving levies to the Exchequer could reduce business electricity prices by up to 20% and lower the average household energy bill by as much as £250 annually, when including a previous intervention. This action could also boost business investment, reduce inflation by 0.3 percentage points, and accelerate the electrification of energy demand.
Ed Matthew, Director of UK Programme at E3G, stated that removing these taxes is crucial for tackling the cost of living and enabling reindustrialisation. Dhara Vyas, Chief Executive of Energy UK, added that taking levies off bills would demonstrate the government's commitment to addressing fuel poverty, growing the economy, and reducing inflation.