The boss of British Gas owner Centrica has urged Rachel Reeves to raise taxes to bring down energy bills.
Chris O’Shea said the Chancellor must act to prevent hard-up households from shouldering the cost of the net zero transition.
He signalled that Centrica would support plans to shift green levies from household bills to general taxation.
Speaking on BBC Radio 4’s Broadcasting House, he said: “The cost of the energy transition is not small. It’s not because renewables are expensive, it’s just because we have an energy system that was designed for a world that no longer exists, so we’re having to upgrade the energy system and that requires a quite substantial investment.
“At the moment, the costs for doing that come off consumer bills. There is an option to put that on general taxation and that’s something that we would support at Centrica.”
Rain Newton-Smith, the director general of the Confederation for British Industry (CBI), last week warned that the net zero costs were acting as an “anchor” on UK ambitions.
Cutting industrial energy costs is one of the key challenges holding back the launch of the UK's new industrial strategy, which will no be released at the end of June.
The strategy, originally slated to be launched in the spring, has been held up as ministers hold last-minute negotiations with the Treasury over departmental budgets, ahead of the spending review on Wednesday.
The FT says it is a "big month" for Prime Minister Sir Keir Starmer’s economic policy, as chancellor Rachel Reeves will announce the conclusions of her spending review — covering the rest of the parliament — on June 11.
A long-term infrastructure plan is set to be announced the following week, accompanied by announcements of specific projects. The industrial strategy and a separate trade strategy will be launched in the week starting June 23.
The industrial strategy will include plans for advanced manufacturing, clean energy, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services.
It will also address two of the big issues that affect the whole economy: high energy costs and skills shortages.