Andy Burnham, the Labour MP for Makerfield, has been urged to take swift action on his first day as Prime Minister by making three crucial changes to support businesses. Central to these demands is a sharp reduction in business energy costs, which could unlock an estimated £130 billion in economic growth by 2050.
The calls to action focus on three main areas: lowering electricity prices, reforming the energy system, and boosting support for business electrification, including promoting electric vehicle adoption within the commercial sector.
A joint report from business group CBI and Energy UK highlights that UK electricity prices are approximately 45% higher than the G7 average, creating a significant barrier to productivity and competitiveness across the economy.
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Louise Hellem, chief economist at the CBI, emphasized the urgency of this issue. She stated that reducing business energy costs must be “a day-one priority” for the new prime minister. “Years of policy costs added onto electricity bills have left UK businesses burdened with some of the highest prices globally. This hampers firms’ ability to invest, electrify operations, and compete internationally, all of which are essential for driving economic growth,” Hellem explained.
The high energy costs not only affect businesses but also hold back broader economic progress. “To address the cost of living crisis and fund vital public services, we need stronger economic growth. Skyrocketing energy bills make it harder for companies to contribute to that growth,” she added.
Dhara Vyas, CEO of Energy UK, echoed these concerns, warning that continued high energy costs threaten business investment, reduce UK competitiveness, and exacerbate the cost-of-living crisis.
Meanwhile, environmental campaigner Robert Palmer, deputy director of Uplift, argued that increased North Sea oil drilling is not the solution. He warned that relying on fossil fuels would increase the UK’s dependence on imported gas and called for government investment in renewable energy industries like wind power, which promise long-term jobs and sustainability.
As the UK prepares for a new leadership era, these calls underscore the urgent need to address energy costs to ensure a more competitive and prosperous economy.