The government recently unveiled its new Energy Strategy, which aims to boost UK energy independence and tackle rising prices. Under the government's new plan, up to 95% of the UK's electricity could come from low-carbon sources. Here, we take a look at the Energy Strategy in greater detail.
Support with energy bills
As part of the Energy Strategy, the government unveiled a £9.1 billion package of support, including a £150 non-repayable council tax rebate for most households in England, to be paid from April. Comparable provisions are being made available in the devolved administrations.
Meanwhile, the Energy Bills Support Scheme will see households in Great Britain given a £200 reduction in energy bills from October. This will be recovered through energy bills and will help to spread the cost of the energy price shock over five years from next year. Additionally, the government will invest £500 million in a Household Support Fund to be used by local authorities in supporting vulnerable households with food and utility bills.
Help for businesses
In recognition of UK industrial energy prices being higher than those of other countries, the government is extending the Energy Intensive Industries (EII) Compensation Scheme for a further three years and will increase the aid intensity to up to 100%.
The government stated that it will also consider other measures to help businesses, including increasing the renewable obligation exemption to 100%.
Business groups' reactions to the Strategy
Business groups, including the Confederation of British Industry (CBI), the British Chambers of Commerce (BCC) and the Trades Union Congress (TUC) reacted to the publication of the Energy Strategy.
The CBI stated that the Strategy 'sets an ambitious bar for a more resilient, low carbon energy system for the future'. Rain Newton-Smith, Chief Economist at the CBI, said: 'Bold words must now be matched by bold actions from the government. The proof will be in the Strategy's delivery, in partnership between business and government. Business believes greater energy independence must go hand-in-hand with delivering a net-zero, higher growth economy.'
The BCC labelled the Strategy as a 'missed opportunity'. Alex Veitch, Director of Policy and Public Affairs at the BCC, said: 'The transition to the cheaper, cleaner energy sources of tomorrow is vital, however prices are soaring today, and businesses need support now. This strategy is a missed opportunity to provide that which is why we are urging the government to introduce a temporary SME price cap, expansion of the energy bills rebate scheme to include SMEs and a six-month extension to the Recovery Loan Scheme.'
The TUC said that the Strategy 'fails to rise to the challenge of the climate emergency'. Frances O'Grady, General Secretary of the TUC, said: 'It does little to reassure the millions of workers facing big falls in their living standards due to soaring energy costs.
'A mass home insulation programme would slash bills and create over 200,000 jobs. But it is entirely missing from the strategy.'
The Energy Strategy can be found in full here.