CBI highlights lack of clarity and mistrust on energy

COST and the security of supply are the top priorities on energy for businesses and households in the region, according to research by business group the CBI.

A survey of 261 households in the North West and 104 leaders of businesses in the North, found that affordability is the number one concern – 80% rated it so.

Two thirds, 66%, of households rated energy security as very important. Meanwhile, 57% of businesses in the North of England believe the cost of bills is very important.

The survey revealed a lack of clarity about what has driven price rises – 71% of domestic users believed energy company profits are the main reason for energy price rises, despite profits accounting for only 4.3% of an average bill in 2012.

Just 32% of households identified wholesale costs as a key driver of energy price rises, which contributed to 62% of increases in household energy bills between 2004 and 2011. 45% of businesses in the North of England also cited wholesale costs as a key reason for price rises.

Damian Waters, CBI’s North West director: “We need long-term thinking on energy and an honest conversation about future bills and how to support North West consumers and businesses in managing them.

“It’s clear from our poll that people in North West don’t necessarily get how the UK’s energy objectives relate to each other, let alone how they relate to the bills they pay each quarter. This leads to a lot of misunderstanding and mistrust.

“With profits very much under the spotlight, it’s important to remember that companies need to make a fair return in order to make the investments we so desperately need. But it’s right for energy companies to demonstrate there is nothing to hide.

“Ultimately the outcome we all want to see is politicians, investors, business users and consumers finding common ground – working together to tackle our energy and climate change objectives.”  

In terms of solutions, 38% of consumers in North West would like to see greater competition between energy companies; a further 31% of households cited energy efficiency measures as a solution, while 27% felt they need to changing their behaviour to reduce their energy consumption.

Tackling climate change is also seen as a key issue for households in North West, with 42% rating it as very important. 26% of businesses in the North also highlighted climate change as key.