Net zero costs which push up energy prices and “anchor” businesses’ ambitions to grow must end, the boss of the Confederation of British Industry (CBI) will tell government officials at an event in London on Thursday evening.
Rain Newton-Smith, the chief executive of the Confederation of British Industry (CBI), is set to urge the Treasury and Department for Business and Trade to roll out an industrial strategy that tackles high UK energy costs which currently far surpass prices seen in competing economies such as France, Germany and the US.
In her address to government officials and business owners at the CBI’s National Business Dinner in London, Newton-Smith will urge the government to dial down net zero policies which are making it “harder and harder” for businesses to stay in the UK and to provide more support to firms transitioning to greener energy.
While Newton-Smith will acknowledge that the government’s net zero push has “become controversial “ and “low-carbon energy” will help UK become economically secure in the long run, she will argue that governments have pushed for renewables “too fast” and thereby damaged key manufacturers of metals and chemicals.
“The cost of building the network is immense.That is being felt by bill-payers across the country,” she will tell the event.
“UK firms cannot carry their part of that without hitting our ability to compete. That’s why we’re calling on the government to remove policy costs from electricity bills.”
“[Businesses] can’t wait for the energy transition to finish.”
In an echo of former Prime Minister Tony Blair’s comments on the costly impacts of phasing out fossil fuels, the CBI boss will point to recent surveys it has conducted showing two in five businesses plan to cut investment due to higher energy bills.
She will also reference a minerals firm company who said energy costs in the UK were five and a half times more expensive than in the US.
Electricity prices are around 19 per cent above the EU average, recent data has shown, while Make UK recently claimed it faces energy bills 46 per cent higher than the global average.
“[Firms] need fair prices and targeted support to decarbonise now. Across the economy, the message is clear: we cannot deliver economic security without action on energy.”
Net zero strategy to be revealed
The government’s industrial strategy is expected to be revealed in days, with boosting nuclear energy – likely through building mini power stations – expected to feature heavily in the blueprint for economic growth and advancing the UK’s drive to becoming a net zero economy.
It will follow the publication of Labour’s Spending Review next Wednesday, which will detail government expenditure on net zero policies.
Small business minister Gareth Thomas chaired a review of sustainability at small and medium-sized businesses which set out recommendations on how firms can cut energy costs and profit from clean energy.
A survey in the review said that nearly three quarters of companies saying the perceived cost of implementing greener practices was a barrier to sustainability.
Michelle Ovens, the founder of industry group Small Business Britain, told City AM that firms could install solar panels and cut waste to reduce their own costs.
She argued that net zero practices were not as expensive as first thought as businesses could find ways of cutting costs on packing or energy efficiency.
“Of course there’s an onus on the government and GB Energy, which will play a big role, in bringing energy costs down. But we’re seeing lots of small businesses take that into their own hands.”
A government spokesman said: “Through our sprint to clean power, we will get off the rollercoaster of fossil fuel markets – protecting business and household finances with clean, homegrown energy that we control.
“We are already bringing energy costs for key UK industries closer in line with other major economies through the British Industry Supercharger – saving businesses £5 billion over the next ten years.”
By City AM
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