UK’s employers, energy sector urge new PM to slash power taxes

[LONDON] Britain’s new prime minister must slash energy levies paid by businesses to speed up economic growth, a leading employers group and an energy trade body said on Tuesday (Jul 14).

With former Manchester mayor Andy Burnham poised to enter Downing Street, the Confederation of British Industry (CBI) and Energy UK said 40 per cent of firms were cutting investment due to high energy costs with electricity prices 45 per cent above the Group of Seven median.

The two organisations said in a report the government should remove its Renewables Obligation and Feed-in Tariff costs for all businesses.

The money could be raised via general taxation or a publicly or privately financed Energy Transition Funding Scheme.

The Climate Change Levy should also be taken off non-domestic electricity bills, the CBI and Energy UK said. The changes could cut energy costs by up to 20 per cent.

Other reforms are needed to reduce the cost of the energy system and support electrification of the economy.

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“If we want to tackle the cost of living and invest in public services, we need stronger economic growth – and that can’t happen while firms are navigating sky-high energy bills,” Louise Hellem, the CBI’s chief economist, said.

Separately, the Trades Union Congress called for a hike in a tax on bank profits to allow a cut in energy bills for most households. REUTERS