More than 120 organisations are calling on the government to reduce taxes on electricity bills, warning that high costs are damaging businesses, household finances and the UK’s transition to a low-carbon energy system.
The letter, coordinated by Energy UK and E3G, says UK energy costs are now 70% higher than in 2021, while electricity prices are 45% above the G7 median.
The organisations argue that moving electricity levies from bills to the exchequer would help reduce costs while encouraging greater electrification of transport, heating and industry.
The proposals come as high gas prices continue to affect energy markets, with the ongoing conflicts in the Middle East contributing to increased volatility. The signatories say reducing costs that are within government control could provide more immediate relief.
Moving levies to government spending could cut business electricity prices by up to 20% and reduce average household energy bills by as much as £250 a year, when combined with previous measures.
The letter also highlights the potential impact on low-income households. It estimates a typical electrically heated home could save as much as £420 annually, with lower electricity costs helping tackle fuel poverty.
Businesses are also facing growing pressure, with more than 40% reportedly cutting investment because of high energy costs. Previous analysis cited in the letter suggests bringing UK electricity prices down to the G7 median could generate an additional £250 billion in economic output over the next decade.
The organisations argue that cheaper electricity could also strengthen energy security by encouraging consumers and businesses to switch from fossil fuels to electricity generated increasingly from domestic low-carbon sources.
They say the UK’s expansion of homegrown clean power has reduced exposure to international gas markets, but that further action is needed to increase demand for electricity.
The campaign is backed by consumer groups, businesses and organisations across sectors including manufacturing, retail, housing, food and hospitality.
The signatories are urging ministers to use the Autumn Budget to make electricity more affordable, arguing that lower costs would support investment, reduce pressure on households and help accelerate the UK’s transition towards a more electrified economy.
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