Insight based on our survey of manufacturers and retailers.
We surveyed 100 retail decision makers in companies with 250 or more employees regarding the energy efficiency tax review which contains the government’s proposal to introduce a single tax and reporting framework.
The over-riding message is that the government is heading in the right direction. In fact, 90% of retailers agree that the introduction of a single energy consumption tax would encourage them to keep their business within the UK and almost nine in 10 (88%) believe it will help them stay competitive. This is a strong starting point.
However, an overwhelming majority (97%) still feel more needs to be done to reduce red tape for business. The proportion of firms that feel this way may drop once the changes take effect and their reporting obligations become clearer. In the meantime, the government has a responsibility to communicate the substance of the review and clarify the implications of the proposals in a language that resonates with business. All the more so, when you consider that almost half (48%) of retailers surveyed are concerned about the financial implications of moving to a single reporting framework and one in five admit that they don’t understand the ramifications for their business.
Ultimately, the government is intent on raising productivity and business contribution to the reduction of greenhouse gas emissions. This requires business sponsorship and support, which the government can only achieve through listening and responding to business needs and being absolutely candid about the possible repercussions of policy change; hence the necessity for business involvement in the upcoming consultation.
It’s therefore concerning that 39% of retailers were not aware a consultation is due to take place and another 39%, who are now aware (either through the survey or other means), do not intend to participate in the consultation.
Exclusion will lessen businesses’ opportunities to make themselves heard. For instance, 56% of retailers surveyed believe tax reliefs on energy-saving projects and technologies are the best mechanism to deliver incentives for investment in energy efficiency and carbon reduction. This information won’t reach government, and influence policy decisions, without the businesses that hold this view, engaging in a structured dialogue.
Overall, retailers believe the government’s energy efficiency tax review contains good news, for businesses and government. Two thirds (66%) agree that a move to a single energy efficiency tax and new reporting scheme would incentivise their company to invest in energy efficiency. The government and the energy industry now need to bring them along for the journey, so they can inform, shape and influence the very mechanisms they have such strong vested interests in.