By Benson Daniel
More than 120 business organisations, charities and consumer groups have called on the UK government to remove policy-related charges from energy bills, arguing that the additional costs are placing unnecessary pressure on households and businesses.
The groups are urging Chancellor John Healey to shift the cost of several energy policies from consumers to the government, rather than continuing to recover the money through electricity and gas bills.
The levies currently account for about 10% of household energy bills and help finance a range of government programmes, including renewable energy development, nuclear power and support for households struggling with energy costs.
Supporters of the proposal say moving the charges to general government spending could reduce the average household energy bill by about £250 a year. Businesses could also see electricity costs fall by around 20%, according to estimates cited by campaigners.
The demand comes as UK households and companies continue to face elevated energy costs. Energy bills have risen sharply since 2021, while the recent conflict involving Iran has added further volatility to international gas and electricity prices.
Forecasts suggest the average household energy bill could rise to about £1,872 in January 2027, increasing pressure on families already dealing with higher living costs.
The organisations argue that expensive electricity is also becoming a barrier to economic growth. They warn that high energy costs are putting pressure on company finances, discouraging investment and making it harder for British businesses to compete internationally.
The call puts additional pressure on Healey ahead of his first budget as chancellor, scheduled for October 28. The government is under growing pressure to find ways of supporting households and businesses without worsening public finances.
The groups believe that funding energy policy through taxation rather than individual bills would make the costs more transparent while providing immediate relief to consumers.
The proposal also comes as the government considers wider measures to tackle inflation and revive economic growth. Energy costs remain an important part of the economic debate because they affect household purchasing power as well as production, transportation and operating costs across businesses.
For manufacturers and other energy-intensive industries, the cost of electricity has become a particularly significant concern. Industry representatives have repeatedly argued that high power prices make it harder for British firms to expand production and compete with companies operating in countries with cheaper energy.
The campaigners therefore want the government to treat lower energy costs as part of its broader economic strategy rather than relying primarily on measures aimed at individual households.
Whether Healey will adopt the proposal remains uncertain. The government has previously introduced measures designed to reduce energy costs, but the latest demand would require a broader change in how energy-related programmes are financed.
With the budget approaching, business groups and consumer organisations are expected to continue pressing the government for measures that can reduce energy bills while strengthening the UK’s economic competitiveness.
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