Businesses are demanding greater certainty around the future of energy policy in the UK after last week’s Autumn Statement left them “disappointed at the lack of focus on energy”, according to an open letter to the Department for Business, Energy & Industrial Strategy (BEIS).
Energy consultancy Inenco, which works with over 8,000 businesses across a range of sectors, has written to the government to express concerns over the lack of energy policy progress in Philip Hammond’s first Autumn Statement as chancellor.
Inenco states that recent developments in the energy sector, such as the “much overdue decision” on Hinkley C and the approval of the fifth carbon budget have provided greater direction for businesses and provided greater insight into future costs.
However, it adds: “There remains a strong sentiment of confusion amongst the community of business energy professionals.”
This has been caused by the slew of policy changes made over the last 18 months, such as the decision to scrap the Carbon Reduction Commitment and recover its revenue from a rise in the Climate Change Levy. Inenco argues that this will see energy costs for some businesses rise by 25% before the end of the decade, when combined with other rising non-commodity charges.
The ongoing review of the business energy efficiency tax regime, first launched in September 2015 with a consultation, is continuing to add confusion after businesses were told to expect a single reporting framework in place of existing schemes in March this year.
No additional information has emerged and Inenco has argued that all the decisions still yet to be made are having a major impact on the forecasting, planning, resourcing and bottom line of the UK’s organisations.
After consulting with energy professionals on what BEIS’ priorities should be, Inenco said: “The overwhelming consensus was greater clarity around future policy direction, more certainty over rising non-commodity charges, and improved consensus around low carbon investment and the future direction of the carbon floor price.
It is therefore calling on BEIS to consider these concerns and deliver a long term vision for energy policy with a clear framework of delivery, ahead of the 2017 Budget, rather than more short-term changes that businesses must respond to and implement.
“Businesses require greater clarity around the future of energy policy and greater consistency to provide them with the confidence to plan for the long term,” the letter states.
The government has faced mounting pressure throughout 2016 over its perceived lack of energy policy, with the likes of the CBI, the Prince of Wales’ Corporate Leaders Group (CLG) and the Committee on Climate Change all pointing to a much greater need for policy.
While it is thought that successive governments have been guilty of neglecting energy policy, a number of businesses have claimed BEIS’ top priority should be to develop new policies.