More than 120 organisations, including major businesses and charities, have urged the Chancellor to remove "hidden taxes" from energy bills. They argue this measure would help reduce costs for consumers and prevent business closures.
In a letter addressed to the Chancellor, signatories such as Energy UK, the CBI, End Fuel Poverty, and Age UK, called for the government to cover levies that currently account for 10% of energy bills and fund various policies. The organisations also seek to scrap the remaining levy funding for renewable energy projects and end levies supporting nuclear power plants, the warm homes discount scheme, and the feed-in tariff programme.
The letter suggests that transferring these levies off bills could lower the total average household bill by as much as £250 annually. This figure includes a £150 saving from former Chancellor Rachel Reeves's previous actions to reduce some levies funding green energy schemes. Additionally, it is argued that electricity prices for businesses could decrease by 20%.
Ed Matthew, director of UK programme at thinktank E3G, which co-authored the letter with Energy UK, stated that the UK is "actively sabotaging its own efforts to bring down energy costs by taxing electricity." Dhara Vyas, chief executive of Energy UK, added that removing levies from bills would demonstrate the government's commitment to tackling fuel poverty, the cost-of-living crisis, economic growth, and inflation.