Urgent plea to Government to ease the cost of the energy crisis to save jobs in Peterborough

Fears of major job losses as employers struggle with soaring energy costs has prompted Peterborough business leaders to join a national call for action to Government.

A five point plan to tackle the crisis has been unveiled by business lobby group, the British Chambers of Commerce (BCC), which warns that time is fast running out for meaningful action.

Top of the action plan laid out in a letter to ministers is a five per cent cut in VAT on energy, a temporary reversal of the hike in National Insurance, and tougher powers for energy watchdog Ofgem.

The Chambers also want to see the introduction by the Government of an Emergency Energy Grant for small and medium sized businesses plus a review and reform of the Shortage Occupation List – those roles deemed to be difficult to fill from the UK labour force and so eligible for relaxed criteria for overseas workers – to help bring down wage pressures and fill staffing vacancies.

Vic Annells, chief executive of Cambridgeshire Chambers of Commerce, which is a signatory to the letter, said: “I find it surprising that our Government is not already working to solve this ahead of the Conservative Party leadership election.

He said: “I am calling on the two leadership contenders - Liz Truss and Rishi Sunak - to sit down with the Prime Minister Boris Johnson to take action immediately.

“And I also call on our MPs, Peterborough MP Paul Bristow and North West Cambridgeshire MP Shailesh Vara, to get behind the pressure for the Government to act now.

He warned: “If action is not taken now to help companies tackle the energy crisis, many people will lose their jobs as Peterborough firms start to really struggle.

He said: “The cost of living crisis and the cost of doing business crisis will be the largest for business I have ever seen in my career.

“It is unusual for the Chambers of Commerce to step out in such a urgent and direct way.

“But I can’t see how Peterborough can continue to grow with all these pressures on business and I am worried for the security of jobs going forward with inflation racing away due to spiralling energy costs.”

The Chambers say the cost-of-living crisis and the cost-of-doing business crisis are two sides of the same coin.

They warn that the Bank of England’s projections of a recession and consumer confidence at a 50-year low are clear signs that the Government is running out of time to offer businesses and households the support they need.

It says that over the last 18 months, BCC research has shown unprecedented inflationary pressures on businesses, with two thirds of firms expecting further price rises.

Energy bills, raw materials, and labour costs are all cited as the top drivers of price rises.

The Chambers say research shows a reduction in the percentage of firms expecting to grow in the next 12 months, from 63 per cent in the first quarter of the year to 54 per cent in the second quarter.

What is in the BCC’s letter to the Prime Minister?

The BCC is to the point about the urgency of the current situation and the need for urgent action.

Shevaun Haviland, director general of the BCC, tells the Prime Minister, Chancellor of the Exchequer and Ms Truss and Mr Sunak that another month cannot pass without action.

He states: “In June, we gave the Government until the Autumn budget to get its house in order, but the latest economic projections released since then have been worse than expected.

“We simply cannot afford to see another month of the same old news.”

He adds: “Since the start of 2021 we have been repeatedly hearing the same message: the cost-of-doing-business is increasing.

“At over 10 per cent, CPI inflation is at a 40-year high; interest rates are seeing the largest increase in 27 years; and eye watering energy bills have created a perfect storm of increasing costs.

“The impact of these challenges on consumers, businesses and wider society cannot be overstated.

“The BCC’s five-point plan is not solely about ensuring support for businesses.

“It is also about protecting jobs, securing livelihoods, and creating a vibrant and prosperous society for everyone.

“Good business is good for our communities, and we must support firms and the individuals that run them to ride out this economic storm.”

Why should we take this seriously?

Mr Haviland says the BCC is well placed to understand the need of businesses.

He states: “Through feedback from accredited Chambers of Commerce around the UK, alongside our extensive research and survey work, we know what businesses require now to survive and plan for growth.

“The problems are well understood. We at the BCC are offering solutions.

“It is now over to the Government to take action to protect businesses, livelihoods and jobs.

He said: “The regulation of the energy sector for businesses must be strengthened.

“Businesses also need to receive support for spiralling costs through grant funding and a reduction in VAT on energy bills, along with measures to boost growth such as a temporary reversal of NICs and an urgent reform of the SOL to fill staff vacancies.”

What are the five points?

Ofgem to be given more power to strengthen regulation of the energy market for businesses. Temporary cut in VAT to five per cent to reduce energy costs for businesses. Covid-style support by introducing Government Emergency Energy Grant for small and medium sized enterprises. Temporarily reverse National Insurance Contributions and put money back into the pockets of businesses and workers. Government to immediately review and reform the Shortage Occupation List (SOL) to help bring down wage pressures and fill staffing vacancies.