“Energy Costs an Anchor on Our Ambition": CBI CEO

Rain Newton-Smith, Chief Executive, CBI, will today (Thursday 5 June) tell business leaders and politicians at the organisation’s National Business Dinner in London; “The government has put prosperity over politics on the world stage... now it must do the same for energy.” 

At the event – which is also celebrating the Confederation of British Industry’s 60th anniversary – Newton-Smith will use her speech to highlight the burden on business and argue there is an urgent need to achieve energy competitiveness to deliver economic security.  

She will tell guests: “The security of our economy, rests on the success of our industry. Because how can we be a global Britain, a secure Britain – if we are not a competitive Britain? Unless UK business is fighting fit and backed to the hilt. 

On energy costs Newton-Smith will argue: “UK firms pay among the highest electricity bills in the world. 50 per cent more than France or Germany, four times more than the US and Canada. There is not a business in this room untouched by that. 

“New survey data from UK businesses shows over the past three years, almost 90 per cent of firms have seen their energy bills rise – a third by more than 50 per cent.  

“Four in 10 tell us they are cutting back on investment as a result. This isn’t just a cost issue. It's a jobs issue. An investment issue. A security issue. 

“Because how can UK business compete with one hand tied behind its back – and the other straining to keep the lights on? This is an anchor on our ambition. A crack in our economic security. And it must be fixed.” 

Newton-Smith will say energy competitiveness is the way to deliver economic security: “I know the energy transition has become controversial in some quarters. But this is not a choice between cheap energy and pursuing net zero. That is a false choice.  

“Let me be very clear: business isn’t interested in short-term politics – we’re focused on long-term results. We know the real opportunity for the UK lies in a low carbon economy – and investment in energy efficiency and new tech.  

“As our CBI Economics report showed, the UK net zero economy grew 10 per cent last year while the economy as a whole stagnated. It supported 900,000 better paid, secure jobs.  

“If economic security is our destination, then make no mistake: affordable, reliable, low-carbon energy is the road that gets us there. Using our own, independent, renewable resources to power our future. Free from volatile prices and hostile actors.  

“What we need now is a serious plan alongside the industrial strategy: to cut energy costs, to manage the shift from fossil fuels, to boost efficiency, storage and system flexibility. This government has already shown it can put prosperity over politics on the world stage. Well now it must do the same for energy at home. Because this isn’t about culture wars. It’s about common sense.” 

Newton-Smith will go onto argue: “Bringing more renewables too fast onto the grid without storage can push electricity prices up. And the cost of building the network is immense. That is being felt by bill-payers across the country.  

“But UK firms cannot carry their part of that without hitting our ability to compete. That’s why we’re calling on government to remove policy costs from electricity bills.” 

“Nowhere is that more urgent than our energy-intensive industries. From metals to chemicals, these are bedrock industries. Foundations of our economic security. But right now they are bearing the heaviest load. One minerals firm told us their UK energy bill is up to 450 per cent higher than in the US. 

“These businesses are finding it harder and harder to stay in the UK. They can’t wait for the energy transition to finish. They need fair prices and targeted support to decarbonise now. 

“Across the economy, the message is clear – we cannot deliver economic security without action on energy. Without putting prosperity, once again, over politics.” 

On the mounting pressure on firms, she will say: “When the Chancellor last joined us at our Annual Conference in November, many of you were there. We had just learned of government’s planned rises to National Insurance, and the national Living Wage. Well, this April – business felt the full force of that.  

“We’ve run the numbers. Business is now straining under £24 billion in extra costs per year. That’s more than the cost of Crossrail. More than the Home Office budget – on business, every year.   

“Now, the Chancellor doesn’t have a magic money tree. As nice as that would be. And every taxpayer pound must be spent very wisely. But with costs running so high, there is one issue we absolutely must tackle. Without it, any industrial strategy, any serious plan for economic security will fall flat on its face. Energy.”