The government must provide more direct support for businesses and consumers dealing with a coming surge in energy prices after the Russian invasion of Ukraine, one of the UK’s top business bodies has said.
The Confederation of British Industry (CBI) today urged the government to “support energy intensive industries that lie at the heart of our critical supply chains but are threatened by soaring prices”, adding that “the government will need to think urgently about consumers as bills go higher still later in the year”.
CBI director-general Tony Danker also called for the government to bring forward more “investment tax deductions” to boost private sector investment.
Energy bills had already been spiralling since autumn last year and it is expected to get much worse in light of UK and EU decisions to reduce their Russian energy exports.
Energy UK predicts Ofgem’s energy price cap, which sets a ceiling on household energy bills, will increase from £1,971 a year to £3,000 a year.
Comparison site TheEnergyShop.com is warning the price cap could get as high as £3,750 – a more than £2,500 increase in bills compared to October 2021.
Calls are growing louder for the government to provide more financial assistance, after already outlining a £9bn plan in January to give households at least £350 this year to help with their energy bills.
There have also been calls for financial support for manufacturing businesses that use high amounts of energy and do not benefit from a regulated price cap.
“We need to recognise immediately the looming crisis in domestic and business energy bills,” Danker said.
“We need to move immediately towards energy efficiency in homes to dampen down demand. And government will need to think urgently about consumers’ as bills go higher still later in the year.
“We also need to support energy intensive industries that lie at the heart of our critical supply chains but are threatened by soaring prices.”
Labour leader Sir Keir Starmer also pushed Boris Johnson yesterday to provide “urgent” help on energy bills during Prime Minister’s Questions (PMQs).
The Prime Minister indicated that the UK would instead try to increase the supply of energy in the short-term and said he would bring forward his new “energy independence strategy” in the coming days.
“What we are junking is the failed energy policies that left us without enough nuclear power,” he said.