CBI poll shows utility prices and security of supply more important than tackling climate change for business and consumers alike

CBI logoEXCLUSIVE by Our Environment Correspondent

The Confederation of British Industry (CBI) has warned that politicians are putting investment in the energy sector at risk through “short-term thinking”.

CBI Deputy Director-General Katja Hall told the confederation’s energy conference that “long-term thinking” needed to be brought into the debate about energy prices and investment in infrastructure.

She said: “The outcome we all want to see is politicians, investors, business users and consumers finding common ground – working together to tackle our energy and climate change objectives.

“Long-term certainty is needed but just as policies start to click into place, the political climate heats up again. It feels like a game of snakes and ladders.

One careless comment or populist proposal – whether we’re talking about cutting support for onshore wind farms or freezing energy prices – can make businesses feel like they’re right back at square one.

“For investors, this is a real worry. And when that investment can go anywhere in the world, it should be a real worry for politicians too.”

Her comments came as a poll by the CBI found that 57% of businesses think that the UK’s energy supply is less secure now than it was five years ago and 73% of businesses listed energy security as being “very important” to their work.

 

%-age of respondents that rate tackling climate change as very or fairly important for the UK

Business           Consumers

70                     76

 

%-age of respondents that rate energy security as very or fairly important for the UK

Business           Consumers

95                     90

 

%-age of respondents who believe ensuring bills remain affordable is very or fairly important for the UK

Business                       Consumers

96                                 94

This suggests that more must be done to communicate both the importance of, and the opportunity presented by the low-carbon transition, said the CBI. With a £128bn share of the global green market, the UK has a good story to tell, but it is clear that such abstract figures are not resonating: to further build support, it is essential that the public and businesses are made aware of the benefit to them, both in the short and long term.

While profits only account for around 4% of an average dual fuel energy bill, it is clear that greater transparency will be key to rebuilding confidence in the market.

 Looking ahead, rather than falling into a blame game between industry and politicians, it is crucial that we have an honest debate about future price trends. Huge levels of investments are needed in order to secure our energy supplies, diversify our mix and drive economic growth. We cannot ignore the fact that this, along with rising wholesale costs, will have an impact on bills – and attention must be focused on supporting businesses and households in managing this.

When considering the best way to keep bills manageable, almost half of business decision makers and over a third of the public would like to see greater competition between energy companies. Improving competition in the market can certainly put downward pressure on prices, but is only one part of the answer – particularly as only around 20% of an energy bill is open to competitive forces.

Beyond simply managing costs, energy efficiency can play a significant role in meeting all our energy objectives, however we have yet to make meaningful advances.

For businesses, the policy landscape remains unbearably complex, and we have some of the draughtiest homes in Europe, with the Green Deal still struggling to find its feet. Efforts must be re-doubled to make greater progress.

Speaking at the same CBI conference, Energy Secretary Ed Davey said Britain was “one of the most energy secure countries anywhere in the world”.

He added: “Between 2010 and 2013 – we estimate more than £45bn was invested in electricity generation and networks.Energy investment in the UK is a great economic success story. And we should be talking it up.”

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 575 business leaders from businesses of any size. Fieldwork was undertaken between 12th – 16th May 2014. The survey was carried out online. The figures have been weighted and are representative of GB business size.

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,338 adults. Fieldwork was undertaken between 12th – 13th May 2014. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).

Pixie Energy

Pixie logo Pixie Energy is an incubator and a facilitator of strategic research and project work, focusing on energy regulation, policy and markets at the local and national level. Find out more about Pixie Energy here.

Local Energy Matters: Scotland

Local Energy Matters: Scotland is a free-to-download brochure with a focus on energy tariffs in the two Scottish electricity distribution regions, as well news on local energy and low-carbon schemes.

Previous editions can be download here.

Scottish energy market overview

You can read an overview of the Scottish energy market here.

Scottish Government energy feed