Business trust has dominated the political debate over the past twelve months, with the energy industry right in the eye of the storm. A new CBI/YouGov survey exploring consumers’ attitudes towards the UK’s energy priorities revealed that short term thinking from politicians risks distorting the debate on the UK’s energy future. With household bills currently topping £1,200, it is unsurprising that energy bills are in sharp focus, but when it comes to government policy, the CBI believes that long-term thinking will help get the best outcome for consumers.
The recent CBI/YouGov survey of both businesses and households shows that, while consumers buy into the UK’s three energy objectives – ensuring the lights stay on, keeping bills affordable and tackling climate change – they don’t necessarily get how they relate to each other or the bills they pay. This has led to a lot of misunderstanding and mistrust. For example, almost two thirds of people believe that profits are the main culprit for energy price rises, despite the fact that they only make up around 4% of an average energy bill.
The CBI believes there’s a need to change the way we talk about the energy debate. Industry must of course work hard to rebuild public confidence, while politicians need to show greater leadership in joining the dots between our energy priorities and talking about them as part of an honest conversation about our energy future.
When asked the best way of managing costs, competition was cited by almost half of businesses and 38% of households. The CBI believes that competition can certainly help put downward pressure on prices, but it’s important to understand that energy companies only compete on around 20% of an energy bill, with the rest made up of costs out of their control, such as wholesale prices, social and environmental levies and the cost of transporting the power to people’s houses.
Encouragingly, the poll also showed that consumers understood their role in keeping bills under control, with over a third citing energy efficiency as key to managing costs. Even simple changes in behaviour can result in big savings, with the average family able to save up to £80 a year by remembering to turn appliances off.
Because energy is an issue of such huge national importance, a blame game between industry and politicians must be avoided. The CBI wants decision makers to focus on the areas that will make a real difference to customers.