UK Retailers Push to Cut Green Levies as Power Bills Top £440 Million
Retailers have urged John Healey to slash green policy costs from energy bills, warning that their electricity costs are set to soar by £440m this year. The British Retail Consortium (BRC) – which represents top retailers including Tesco, Sainsbury’s and Marks & Spencer – has warned that rising “policy costs” on energy bills will inevitably push up prices for shoppers. The Chancellor “must take…
UK retailers have called on Chancellor John Healey to reduce green policy costs embedded in energy bills, warning that electricity expenses for the retail sector are set to surge by £440 million this year. The British Retail Consortium (BRC), which represents major retailers such as Tesco, Sainsbury's, and Marks & Spencer, highlighted that these escalating policy levies on energy costs will inevitably drive up prices for consumers.
BRC chief Helen Dickinson emphasized the need for immediate government action to alleviate the burden of numerous policy charges on high street businesses.
Retail electricity costs are projected to increase from £2.72 billion last year to £3.16 billion this year, according to the industry body's analysis. The majority of this rise is attributed to government-imposed charges, rather than the global surge in energy prices stemming from the Iran war, which now accounts for two-thirds of retailers' electricity bills. Transmission Network Use of System charges, aimed at funding grid construction and repairs, are expected to rise by 72%, adding £200 million to retailer bills alone.
Policy costs on retailers' energy bills include the renewables obligation, which funds large-scale electricity generation projects and is set to rise by 2.5% to £646 million this year. Additionally, the climate change levy, designed to promote energy efficiency among businesses, is projected to increase by 2.2% to £151.7 million. Retail accounts for 90% of energy usage within the UK, with electricity being the primary fuel source.
BRC CEO Helen Dickinson stated, "Retailers' energy bills continue to push up the price of everyday essentials for shoppers everywhere." She added that significant reductions in policy charges on electricity bills would ease the pressure on retailers, allowing them to invest in maintaining competitive prices for consumers and preserving jobs.
Retailers have urged the government to address various costs during next month's Budget, including employment expenses and business rates. Department store chain John Lewis cautioned against a "terrible" business rates raid on major retailers, while Co-op blamed Labour's national insurance hikes for recent job cuts.
A government spokesperson responded, "The Chancellor is fully focused on giving families and businesses breathing space and helping ease cost pressures." They explained that the government has removed VAT from electricity bills and is reducing electricity costs by up to 25% for over 10,000 manufacturing businesses through the British Industrial Competitiveness Scheme.
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