In a joint letter, a coalition of manufacturers, infrastructure investors, trade bodies, engineers, consultants, and climate groups has called on Rachel Reeves, the chancellor of the UK’s Exchequer, to reduce electricity prices immediately by moving legacy policy costs from electricity bills to general taxation and providing targeted support for electrification.
According to the letter, UK consumers face some of the highest electricity prices in the world, holding back investment and putting industries out of business at current critical economic and geopolitical conditions. High electricity prices also hinder the UK’s transition to net zero and undermine the UK’s competitiveness.
The coalition stated that shifting policy costs to general taxation would be an effective way of reducing power prices in the near term, while enabling policy costs to be recovered progressively. Energy UK estimates that this would cut business electricity prices by up to £40/MWh, lowering bills by 15 percent, and reducing household electricity bills by up to £370 a year. This would reduce the cost of bills and goods for consumers, and free up business capital to invest in the UK. In addition to moving policy costs from electricity bills, the coalition is calling on the government to provide targeted support for the electrification of industry.
The coalition includes 7Steel UK (formerly Celsa Steel UK), Aldersgate Group, British Glass, Buro Happold, Cemex, Ceramics UK, Chemical Industries Association, Confederation of Paper Industries, E3G, Encirc, Energy Intensive Users’ Group, Green Alliance, Heidelberg Materials, Major Energy Users Council, Material Evolution, MPA and UK Steel.