UK small businesses and charities say nuclear levy could add thousands to bills | Energy industry
British charities and small businesses have warned that a new tax on energy bills to support the government’s nuclear energy targets could increase their costs by thousands of pounds a year.
According to trade groups, the extra charge could mean a significant cost increase for charities and small businesses with high energy consumption; This could mean that social services could be cut and economic growth curtailed.
The tax, which comes into force in November, will mean an increase in costs of between £100 and £240 a year for most charities, but some could see increases of up to £2,500, according to Social Investment Business, an organization that provides loans and financial support to charities.
Nick Temple, CEO of Social Investment Business, said: “Adding more charges on top of charity electricity bills penalizes our most vital social areas when they are already struggling.”
Extra costs for small businesses, including the hospitality sector, could hurt growth in the UK economy and make the switch from fossil fuels to low-carbon electricity more expensive, trade associations say.
The tax is designed to reimburse investors for the Sizewell C nuclear project in Suffolk while the plant is under construction.
Households can expect the tax to add around £12 a year to their energy bills, but high energy users will bear a greater cost burden. This will have a disproportionate impact on small businesses and charities with high energy demands, as energy-intensive sectors such as steel, cement and glass-making are granted exemptions.
A community arts organisation, based in Bristol Virgo IslandThe US has been told a £1,000 a year increase is expected from nuclear duty alone. The company, which provides subsidized studios to underrepresented artists, expects the extra costs to make it harder for them to work.
Kate Ward, deputy director of Spike Island, said the increase in electricity costs would prevent the charity from switching to low-carbon heating such as heat pumps, increasing overall running costs and putting its work with artists at risk.
“The government needs to rethink how it approaches electricity bills to enable more charities and small businesses to make the right decisions for the planet,” Ward said.
Business groups also said costs were a “major concern” for smaller companies, with larger companies being given exemptions so they would have to bear a disproportionate cost burden.
Craig Beaumont, Executive Director of the Federation of Small Businesses (FSB), said: “Small businesses are already feeling the pressure from rising electricity bills and many say this is now hindering their growth. “Further rises in non-commodity costs will only increase this pressure.
“The government is protecting high-density users against these increases, but small businesses’ bills will increase as a result. This is essentially a cross-subsidy. Local small businesses should not be shouldering such a high share of the costs themselves.”
Kate Nicholls, chief executive of trade body UKHospitality, said: “This is another example of hospitality businesses subsidizing other sectors. “It’s not just a nuclear tax, but there will also be energy rebates for large, energy-intensive generators, which will be offset by higher bills for community pubs and neighborhood restaurants.
“Continued focus on the needs of industrial strategy sectors creates real-world impacts for the other 70% of the economy. Adding another cost to hospitality businesses will only put further pressure on prices at the bar, which will increase inflation.”
A government spokesman said: “Thriving small businesses and charities are at the heart of our communities, which is why we’ve extended business rates relief, supporting economic growth across the country and giving support to those who need it most.
“The only way to permanently reduce energy bills is for the government to clean energy superpower mission“This will also secure thousands of good, skilled jobs and billions of dollars in investment.”
