High energy prices are threatening the UK's status as a manufacturing powerhouse, with nearly 40% of firms cutting investment, according to a report by the CBI and Energy UK. Business electricity costs remain 70% higher than before Russia's invasion of Ukraine, while gas prices are 60% higher.
The report warns that without a reduction in energy bills, the risk of job losses, production cuts, plant closures and offshoring will increase. Almost 90% of companies surveyed have seen energy bills rise over the last five years.
UK industrial energy prices are among the highest in the developed world, almost two-thirds above the median of International Energy Agency countries and the highest among G7 members. This acts as a brake on economic growth and investment in clean energy, the report says.
Energy minister Ed Miliband has announced a cut in electricity prices for 7,000 heavy users, but Dhara Vyas, head of Energy UK, described the support as a 'sticking plaster' funded by other bill payers. She said lowering prices for all businesses is fundamental to the UK's growth story.
The CBI and Energy UK are calling for a comprehensive review of energy regulations and the market to spur investment and reduce costs, warning that the UK faces a risk of widespread deindustrialisation if action is not taken.
