CBI Presses Incoming UK Prime Minister on Industrial Electricity Costs
Industry groups warned Andy Burnham that UK businesses pay 45% more for electricity than the G7 median, pushing for policy costs stripped from power bills before he takes office.
The Confederation of British Industry and Energy UK pressed Andy Burnham on Tuesday (2026-07-14) to make reducing energy costs a "priority" before he is confirmed as prime minister, expected in the week of 2026-07-20. The joint statement called on the new administration to work with industry on a plan to cut bills — and attached a number to the cost of inaction: UK businesses currently pay 45% more for electricity than the G7 median.6
The timing matters. Burnham enters office with manufacturing already under visible strain. A June 2026 survey found that 25% of UK manufacturers have already relocated parts of their production overseas or are actively considering moves to Europe and Asia, where energy is cheaper. Another 38% have frozen or delayed investment plans, and 21% have cut staffing levels.3
The arithmetic driving those decisions is not subtle. Roughly half of an industrial business's UK electricity bill consists of government carbon taxes and levies allocated for grid upgrades, according to industry data — a stack of policy choices accumulated over years rather than imposed at once. Government data separately showed that UK industrial electricity prices can run more than 90% higher than the IEA member country median, a premium that leaves energy-intensive sectors at a structural disadvantage against European and Asian rivals.3
The CBI and Energy UK argue that stripping policy costs from power bills is the fastest lever available. They claim the changes could reduce energy costs for businesses by 20% and, combined with wider industrial policy reform, generate £130bn of additional economic output by 2050.6
The 20% figure warrants scrutiny. Policy costs on UK electricity bills are substantial, but removing them shifts the burden rather than eliminates it: funding that currently sits on energy bills would need to come from general taxation or be deferred. The UK's Climate Change Committee said on Wednesday (2026-06-24) that slower electrification exposes households to fossil fuel price shocks, urging faster transition alongside cost relief. Those two objectives point in different directions.4
The wider investment pipeline adds pressure. National Grid is rolling out a £29 billion transmission upgrade, and the National Energy System Operator's Beyond 2030 report warned that connecting offshore wind farms in the Celtic Sea could add another £15bn to grid costs. Those costs flow back to industrial consumers through rising non-commodity charges, regardless of what happens to carbon levies.3,5
Gas still accounted for 31% of UK electricity generation in 2025, compared with 3% in France, which has a large nuclear fleet. That fossil fuel dependence keeps UK power prices closely tethered to NBP front-month gas, which was trading at €46.20 on Wednesday (2026-07-15). So long as that linkage holds, the premium over nuclear-heavy European peers is structural rather than addressable through levy reform alone.2
The government's stated answer is speed: a target of 95% clean electricity by 2030, backed by offshore wind capacity ambitions of 43-50 GW and solar of 45-47 GW. But as Montel noted, Britain's rapid renewable build has produced a new cost alongside the old one. When the grid cannot absorb wind output, operators pay generators to curtail, and those balancing costs end up on the same bills that industry is appealing to Burnham to cut.1,2
The industry coalition's appeal will be tested against that fiscal math. Reducing levies on industrial power bills requires either higher general taxes, slower grid investment, or a deliberate decision to shift net-zero financing off energy bills entirely — each with its own political constituency. A commitment to a review changes nothing for a manufacturer running 25% cash reserves into a fourth quarter.3
What industry will watch in the weeks following Burnham's confirmation is whether the new government signals any concrete shift in how grid upgrade costs are allocated — specifically, whether the National Grid rollout and any Celtic Sea additions are funded through general taxation rather than network charges passed directly to industrial consumers. A policy announcement on cost allocation, rather than a working group, would be the first measure traders and manufacturers could actually price.3,5