The British Retail Consortium has called on the government to take action to reduce policy-related charges on energy bills, citing significant cost increases facing the retail sector. According to the industry body’s analysis, retailers’ total electricity costs are projected to rise from £2.72 billion in the previous year to £3.16 billion this year, with policy levies accounting for the majority of this increase rather than underlying global energy price fluctuations.
Transmission Network Use of System charges, which fund electricity grid infrastructure, are expected to surge by 72 percent and will add approximately £200 million to the sector’s bills. Additional policy costs include the renewables obligation, which is set to increase by 2.5 percent to £646 million this year, and the climate change levy, projected to rise by 2.2 percent to £151.7 million. The retail industry relies heavily on electricity, with the sector using it for 90 percent of its total energy consumption.
The BRC’s chief executive has stated that rising energy costs will inevitably translate into higher prices for consumers and urged immediate government action to address the various policy levies contributing to these expenses. She noted that reducing these charges would provide retailers with financial relief to invest in keeping prices down for shoppers and maintain employment levels. The BRC has also raised concerns about other cost pressures retailers face and is pushing for government intervention through next month’s Budget process.
A government spokesperson responded by highlighting existing support measures, including the removal of VAT from electricity bills and a scheme offering up to 25 percent electricity cost reductions for eligible manufacturing businesses. Major retailers including John Lewis and Co-op have separately expressed concerns about additional government-imposed costs, with some citing workforce reductions linked to increased employment-related expenses.
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