A coalition of more than 120 organizations, including major energy companies, business groups, and charitable organizations, has submitted a letter to the chancellor requesting the removal of levies from energy bills. The signatories argue that these charges, which represent approximately 10% of typical energy bills, should instead be funded through direct government taxation.
The organizations contend that transferring these levies off bills could reduce average household energy costs by as much as £250 per year. This figure includes anticipated savings from previous government decisions to shift a portion of green energy funding to general taxation. The groups also project that removing these charges could lower electricity prices for businesses by approximately 20%.
The letter specifically addresses several types of levies currently embedded in bills, including charges for renewable energy projects, nuclear power plant development, the warm homes discount scheme, and feed-in tariff payments. Signatories note that the feed-in tariff programme, though officially closed in 2019, continues to incur costs through ongoing contracts. The organizations emphasize that current energy pricing policies work counterproductively against efforts to reduce costs for consumers and businesses.
The appeal comes as the UK faces mounting pressure to address energy costs, which remain among the highest in the developed world. Recent forecasts indicate further price increases expected for January, with average annual bills projected to reach £1,872. Additionally, geopolitical developments and wholesale price movements have contributed to elevated costs, with households experiencing the highest energy charges in three years this winter.
The chancellor is scheduled to present his first budget on 28 October. The letter warns that high energy costs threaten business viability and economic growth, with businesses citing energy expenses as a significant constraint on operations and investment decisions.
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