Ahead of the Autumn budget, Energy UK and E3G have coordinated a letter to the Chancellor – signed by more than 120 organisations – calling for levies to be removed from electricity bills.
The letter states that energy bills are currently 70% higher than they were in 2021, which has “profound consequences on the cost of living and economic growth” and sets out the wide-ranging benefits that cheaper electricity would have, for households, businesses and the economy.
Moving levies from electricity bills to the Exchequer could cut business electricity prices by up to 20% and save households a further £100 a year, while supporting investment, easing inflation and accelerating the switch to clean electric heating, transport and industry.
Support for the lettter comes from varied organisations, inclduing CBI (Confederation of British Industry), Which?, Age UK, Nationwide Building Society, Co-op, Make UK, techUK, UKHospitality and the British Retail Consortium.
As Energy UK Chief Executive Dhara Vyas FEI Vyas says: “High electricity prices hurt all of us.”
Moving electricity levies from both business and household bills to government spending would immediately make energy costs more affordable and competitive, providing a greatly needed boost for manufacturing industries and tackling cost of living challenges. It would also address distortions that undermine investment in electrification and improve UK security by making better use of homegrown power generation, reducing our reliance on energy imports.
The letter says that benefits would include:
- Reducing energy bills – Moving levies to the Exchequer would lower business electricity prices by up to 20% and bring the total average domestic energy bill reduction achieved by this government to as much as £250 a year.
- Tackling fuel poverty – Low-income households spend three times the share of their income on levies as wealthier households. Moving levies to the Exchequer would save a typical electrically heated household, which is twice as likely as other homes to be in fuel poverty, as much as £420 per year.
- Boosting the UK economy – Over 40% of companies are cutting investment due to high energy costs. Reducing electricity prices to the G7 median could drive an additional £250 billion of economic output over the next decade.
- Bringing down inflation – The Autumn Budget 2025 energy bills package is expected to lower CPI inflation by 0.25 percentage points in 2026/27. The UK has a clear opportunity to unlock growth and strengthen living standards by addressing high electricity costs. With the right approach, the UK can remove barriers to investment, compete on the global stage, and fully realise its economic potential in a competitive, low-carbon future.
Read the full letter.
