Energy cost rises threaten to freeze firms out of the economy

I know the future is looking very scary for families and pensioners, with predictions of average energy price caps jumping from around £2,000 a year to double that or more in 2023.

Energy cost rises threaten to freeze firms out of the economy

We had our next indication of the direction of travel that energy prices are taking – which is only up – when OFGEM announced the energy price cap will increase to £3,549 per year for dual fuel for an average household from 1 October.

More increases to the cap (and why call it a cap when it keeps increasing??) are expected in January and in the spring of next year.

But spare a thought for the small businesses who do not have even the safety net of the so-called price cap and are facing five figure increases.

According to the Federation of Small Businesses, 15 percent of the UK’s 5.6 million small firms fear they will have to downsize or close their doors altogether.

That’s pretty shocking when you consider that small and medium sized businesses make up 99.9 percent of all businesses and if thousands of them go bust that ain’t going to do the economy any good at all.

Many of these businesses have taken more blows in the last couple of years than Anthony Joshua in his recent title fight defeat!  Covid was a game changer for small businesses, particularly those based in our high streets or leisure and hospitality sectors.  The relationship between business and customer was torn apart and continues to be, in many cases, hard to repair.

However, the tenacity of British small businesses never fails to impress.  I was often interviewed in the media alongside small business owners, and they always remained upbeat about the situation.  Unfortunately, the dramatic and unacceptable rise in energy costs may be the straw that breaks the camel’s back.

It’s very short sighted of government to not consider the plight of businesses facing these extreme energy cost hikes.  Recent government statements often refer back to help offered to get through Covid, like reduced business rates, but nothing is focused on the here and now.

The support packages that householders are receiving are at least something, but these are also the people that work for small businesses. If those businesses go pop and they are left without work, a £400 payment to ease energy bills will be just a drop in the ocean when managing their outgoings.

It’ll also put more pressure on the state because we could soon see the 1 million vacancies turn into 1 million unemployed without the UK’s all-important small businesses!

The time being wasted on the leadership election and the culturally ingrained belief that the world should practically stop because of the August school holidays, means we’ll be playing catch up even more than ever!

So please Rishi, Liz, or even Sir Kier, the next time you come up with a plan to save us from rocketing energy prices, how about giving these stalwarts of UK PLC some hope they have a future?

Charlie Mullins
Charlie Mullins

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