‘Decisive action’ is needed from the UK government to help businesses cope with soaring energy prices, according to the CBI.
A new survey by the business group reveals the extent to which UK businesses, like households, are concerned about the continued rise in energy costs.
More than two-thirds of firms said they expect their energy costs to increase over the next three months, and a third of firms expect energy price rises to negatively impact current or planned investment in Net Zero measures.
With many businesses, particularly those in energy intensive industries and SMEs, already feeling the pinch, further energy price rises could push many viable businesses to the brink unless urgent action is taken to support them and their supply chains, the CBI said.
The organisation called for extra money to be targeted at those households and firms most in need and said that business rates should be frozen for the coming financial year. It also called for HMRC to repeat the Time to Pay scheme, introduced during the pandemic, which gave businesses flexibility over when they could pay their tax.
The CBI also highlighted the need for an energy efficiency drive to give consumers upfront financial support for improving their home insulation and to support energy intensive businesses in reducing their environmental footprint.
“While helping struggling consumers remains the number one priority, we can’t afford to lose sight of the fact that many viable businesses are under pressure and could easily tip into distress without action,” said CBI chief policy director Matthew Fell.
“The guiding principles for any intervention must be to act at speed, and to target help at those households and firms that need it most.”
He added: “Decisive action now will give firms headroom on cashflow and prevent a short-term crunch becoming a longer-term crisis.
“With firms under pressure not to pass on rising costs, there is a risk that vital business investment is paused or halted entirely. That in turn could pose a real threat to the UK’s economic recovery and Net Zero transition.”
