Forget Economic Recovery: Energy Bills To Soar Due To ‘Stealth Tax’

  • Date: 31/03/13
  • Christy Dorsey, The Scotsman on Sunday

Energy-intensive industries are bracing themselves for a renewed surge in utility bills tomorrow when the UK government’s highly controversial Carbon Price Floor starts feeding through into energy costs. The net effect will be to take money out of a fragile economy, with firms committing more of their cash to meet rising operating costs.

Lambasted by business and environmental groups as a “stealth tax”, the price floor is expected to raise up to £3.2 billion over the next three years.

Although critics say the funds should be ploughed back into the green energy technologies that the price floor is intended to support, the money will instead be absorbed for general use by the cash-strapped Exchequer.

Michael Murphy, energy partner with MacRoberts Solicitors in Glasgow, said all business and residential consumers would be affected, with heavy industries, hospitals, councils and other large-volume users bearing the brunt of the increases.

“What we have said to our clients is that we are telling you this not because there is a clever way to avoid it – we are telling you this because your utility bills are going to rocket,” he said.

The net effect will be to take money out of a fragile economy, with firms committing more of their cash to meet rising operating costs.

“That is the first call, and will come before investment in growth and new jobs,” Murphy added.

In an apparent effort to pre-empt any negative backlash against tomorrow’s price increases, the Department of Energy & Climate Change (Decc) released a report last week, which claimed that although utility bills will continue to rise, they will be 11 per cent lower by 2020 than they would have been without the government’s energy policies.

However, the Decc report also conceded that many businesses are bearing a bigger share of the burden brought by government policy.

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