The majority of UK industry will be paying to subsidise “energy intensive” industries if government proposals go ahead, specialists at audit, tax, advisory and consulting firm Crowe UK are warning.
Johnathan Dudley, Head of Manufacturing and SME Corporates, said the impending hike in energy costs for the rest of industry had passed under the radar.
The government has confirmed plans to increase the discount on electricity network charges for energy intensive business to 90% from 60% next year.
The enhanced discount is intended to support around 500 businesses in the steel, glass and ceramics industries, potentially saving them up to £420 million a year.
“The government is billing ’support for energy prices for energy intensive industries’ as a positive, whereas, for most businesses who are effectively being asked to subsidise them, as well as support the expansion of PV in the grid, it’s negative.
He pointed out that the UK currently has the highest energy prices in the developed world for both industrial and domestic consumers.
“This is due to a combination of factors including high taxes, the cost of net-zero policies, and a reliance on imported energy, though specific factors vary by year and source. While specific numbers change, the UK’s prices are significantly higher than in countries like the US, France, and Germany.”
He added: “While the UK is racing to meet its Net Zero targets, other countries in Europe and around the world are strolling towards them, some less than others, some might argue.”
Another cost-saving energy proposal is the British Industrial Competitiveness Scheme, which is intended to reduce the electricity bills of more than 7,000 businesses by up to 25% in 2027 by removing some net zero levies from their bills.
But Dudley said: “The Department for Business and Trade has not yet started its proposed consultation yet, so there must be some doubt over whether it will proceed. We may hear more in the Budget.”
Businesses seeking advice on managing energy costs and planning for net zero can contact johnathan.dudley@crowe.co.uk
About us
Crowe UK is a leading audit, tax, advisory and consulting firm with a national presence that is complemented by our local expertise and international reach. We are an independent member of Crowe Global, one of the top 10 accounting networks in the world. With exceptional knowledge of the business environment, our professionals share one commitment, to deliver excellence.
We are trusted by thousands of clients for our specialist advice, our ability to make smart decisions and our readiness to provide lasting value. Our broad technical expertise and deep market knowledge means we are well placed to offer insight and pragmatic advice to all the organisations and individuals with whom we work. Close working relationships are at the heart of our effective service delivery.
Crowe has UK offices based in Bristol, Cheltenham, Kent, London, Manchester, Midlands and Thames Valley. For more information, please visit: www.crowe.co.uk
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Crowe industry recognition
- Top charity auditor for 16 consecutive years (Charity Finance Audit Survey, 2009 – 2024)
- Risk Consultancy of the Year 2024 for the sixth consecutive year (InsuranceERM)
- UK Member of one of the top 10 accounting networks in the world (International Accounting Bulletin World Survey 2022)
- Awarded Silver in the 2022 Citywealth Brand Management and Reputation awards – Best Overall Marketing Campaign category for Your Life Builder
- Awarded Silver in the 2022 Citywealth Magic Circle awards
- Ranked 3rd in the AIM auditors ranking by number of audits (AIM Advisers Rankings Guide, November 2024)
- 9th largest audit firm in the UK (UK fee income of audit firms that audit PIEs – by fee income on audit, FRC Key Facts and Trends in the Accountancy Profession, Figure 33, September 2024)
