The chief executive of E.On UK has urged the Government to remove a growing burden on business energy bills by transferring energy policy costs into general taxation or a dedicated transition fund, saying the move would encourage firms to invest in low‑carbon technologies and ease pressure on prices.
Policy costs are weighing on firms, E.On warns
Chris Norbury told the Press Association that many UK businesses are keen to adopt electrification and other green measures but are deterred by the immediate expense. The supplier argued that shifting levies such as the renewable obligation and feed‑in tariffs off electricity bills would lower the operational headwinds firms face and create a more stable investment backdrop.
“Whether it’s small, medium or big businesses, they are concerned about rising energy costs, some of the rising commodity costs and therefore don’t want to see an impact from higher policy costs.”
E.On’s own research under its ReIndustrial Revolution analysis claims UK manufacturers could save more than £2 billion by 2035 if they reduce gas use and accelerate clean energy adoption. The group says such savings point to longer‑term gains for companies that accept near‑term transition costs.
What this would mean for prices, wages and jobs
Shifting policy costs into the tax system would change who pays and how the burden is distributed. For individual businesses, removing levies from electricity bills would lower direct energy charges and could ease margin pressure in energy‑intensive sectors. That has consequences for prices and wages: lower energy overheads can reduce the need to raise prices or cut labour costs, and could free cash for investment that supports productivity or jobs.
But the move would also mean those costs are borne through public finances — either broader taxation or a ringfenced fund — potentially reducing revenue available for other public services or requiring alternative tax rises. The company did not set out how a tax shift would be compensated, only that it would “help spark further investment from businesses and help support the transition to renewables”.
Investors and businesses will weigh the trade‑off: a more predictable, lower headline energy bill now versus the risk of higher general taxation later. For struggling firms, the immediate cashflow improvement could be decisive in enabling capex on electrification and efficiency measures.
Company strategy and market context
E.On also highlighted the Government’s recent move — in Greater Manchester under Andy Burnham’s leadership — to remove VAT from consumer electricity bills as a sign ministers are “moving in the right direction” on recognising the benefits of electrification. Norbury said E.On has a “positive and constructive” relationship with the Energy Secretary Miatta Fahnbulleh.
Meanwhile, E.On is pursuing a proposed acquisition of rival supplier Ovo. If approved by regulators, the deal would create Britain’s largest energy supplier, serving around 9.6 million customers. The proposed combination increases the stakes of E.On’s policy pitch: a dominant supplier pushing for structural change to how energy transition costs are recouped could reshape costs for a large swathe of UK businesses and households.
- £2 billion — E.On’s estimate of potential manufacturing savings by 2035 from switching away from gas and scaling clean energy.
- 9.6 million — estimated combined customers if E.On’s deal for Ovo secures approval.
- Suggested policy options: shift levies from bills to general taxation or create a dedicated energy transition fund.
| Item | Figure |
|---|---|
| Potential manufacturing savings by 2035 | £2 billion |
| Combined customers if Ovo deal approved | 9.6 million |
The company argues that a clearer, more supportive policy framework would reduce uncertainty and help companies plan multi‑year investments in electrification, heat pumps and other technologies. For workers, the potential upside is steadier employment and investment‑driven wage growth in manufacturing and energy services. For consumers, outcomes depend on how any tax shift is funded and whether suppliers pass savings through to prices.
As ministers consider the mix of fiscal measures and targeted support to achieve net zero at least cost, the debate E.On has prompted forces a question at the heart of the transition: should the cost of historic and future clean‑energy subsidies be socialised through the tax system, or remain an explicit line on energy bills so it is visible to consumers and businesses?
For now, E.On’s recommendation adds pressure to a Government balancing competitiveness, public finances and climate goals — and it arrives as the supplier moves to expand its market footprint, a combination that will sharpen scrutiny of any changes to how Britain pays for its energy transition.
