Green taxes, energy costs and UK competitiveness once again made headlines during the Liberal Democrat party conference. Business secretary Vince Cable stated his view that as a result of green taxes on energy, UK businesses are struggling to compete with international rivals.
It is a view that many in the business community agree with. Take a recent Npower poll of senior business leaders in the UK, which showed them to be highly sceptical that the case had been made for the government’s energy policy. Fifty-nine per cent of respondents were not confident that current energy policies reflect the needs of business in Britain.
This scepticism was particularly strong when it came to green taxes. Eighty-one per cent ranked affordability the most important energy-related issue for their business, well ahead of the move to a low-carbon economy (41 per cent).
As Cable admitted, criticism of green taxes on the basis of competitiveness does not take account of compensation the government pays to energy-intensive industries. However, it does point to an important fact: the government and the wider energy industry must work together to better educate businesses about energy policy, particularly when it comes to competitiveness.
There is also another way of looking at this issue. The green agenda is not going away and bills are only going to increase. Businesses need to accept this reality and work with energy providers to bring down the cost of energy in other ways – particularly through energy efficiency measures. We have calculated that UK businesses can save up to £4 billion in energy costs if they reduce energy consumption by 20 per cent.
Such a reduction in consumption can be achieved through simple measures, such as investing in on-site energy generation, educating employees on energy efficiency and recycling energy waste. Each business will have its own energy profile and its own ways of driving efficiency, but we strongly believe that most businesses will be able to achieve the 20 per cent target.
As a result of green taxes, energy prices are going to rise, but costs to businesses need not do so at the same rate. We believe that through a real commitment to efficiency, UK plc can remain competitive while helping to reduce carbon emissions.
Wayne Mitchell, head of industrial and commercial, Npower