UK businesses to delay net zero transition as energy bills soar
Rocketing energy prices could stifle investment in energy efficiency or net zero measures, the Confederation of British Industry (CBI) has warned.
In a survey of businesses, 69 per cent said they expected their energy costs to increase in the next three months, with almost a third anticipating rises of more than 30 per cent.
Firms are doing their best to absorb higher bills, with around a third saying they do not expect to pass on additional energy costs to consumers. But 30 per cent said that energy prices would be likely to negatively impact their current or planned investment in net zero measures.
The CBI also warned that energy-intensive industries are already feeling the pinch and further energy price rises could push many viable businesses to the brink unless urgent action is taken to support them and their supply chains.
The body called on the government to “urgently” introduce targeted interventions for the most vulnerable households, give businesses more time to pay their tax bills and freeze business rates in the next financial year.
The organisation also called for a programme to improve energy efficiency by providing people with upfront financial support to help retrofit household insulation.
Matthew Fell, CBI chief policy director, said: “The impact of soaring energy prices on households is going to have serious consequences, not just for individuals but for the wider economy.
“While helping struggling consumers remains the number one priority, we can’t afford to lose sight of the fact that many viable businesses are under pressure and could easily tip into distress without action.
“The guiding principles for any intervention must be to act at speed, and to target help at those households and firms that need it most.
“Firms aren’t asking for a handout. But they do need autumn to be the moment that government grips the energy cost crisis. Decisive action now will give firms headroom on cashflow and prevent a short-term crunch becoming a longer-term crisis.
“With firms under pressure not to pass on rising costs, there is a risk that vital business investment is paused or halted entirely. That in turn could pose a real threat to the UK’s economic recovery and Net Zero transition.”
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