North businesses could fold without further support to cope with energy price rise
Business leaders in Caithness are calling for more support with rising costs as the energy regulator looks set to announce a price cap rise on Friday.
It comes following a meeting hosted by the First Minister, Nicola Sturgeon, at Bute House on Tuesday.
The Scottish Government has called on the UK government to support small businesses as well as households with the energy cap expected to rise to more than £3500 from October.
It wants to see the increase cancelled for domestic customers, with additional support for households and businesses, as well as action taken to protect small and medium sizes businesses, and other organisations not covered by the price cap, from rising energy costs.
The Federation of Small Businesses joined other industry leaders at the meeting and its Highlands and Islands development manager David Richardson warned that small and medium size businesses in the region are facing a dire future.
He said: “With skyrocketing costs and, for some, lukewarm demand, many Highland businesses are in dire straits – and the outlook is even gloomier. Ageing and declining populations are blighting so much of this region, not least Caithness and Sutherland, and we really cannot afford to see small, local, independent businesses go to the wall.
“However, all need not be lost – governments can and must help – and the Federation of Small Businesses is calling on them to introduce a range of measures to ease cost pressures.
“In particular, we’d like to see the hike in National Insurance reversed and cuts to VAT and fuel duty – matters for the UK government.
"For its part, we’d like the Scottish Government to repurpose the residual business Covid grant support money left over from the pandemic and spend it on keeping smaller businesses alive over what looks like being a long and rocky winter."
He also called for the UK government to extend the same level of protection to smaller businesses that it is providing to domestic users.
Trudy Morris, Caithness Chamber of Commerce chief executive, said: "Businesses in the north Highlands are extremely anxious about the energy price cap rises.
"After what has already been a challenging couple of years for local companies, the cost of doing business has reached a tipping point. There is a very real fear that spiralling costs could drive some out of business altogether, not to mention what it will do to households.
"We need urgent action from the UK government. Along with our colleagues from Scottish Chambers of Commerce, we have been calling for an energy price cap for SMEs but other support measures such as reducing VAT and reversing the National Insurance rise are also required to avert a crisis."
The Chancellor is expected to announce the Ofgem price cap increase on Friday.
First Minister Ms Sturgeon said: “Any further increase in energy bills in October will have a profound impact on households, businesses and the public sector already struggling with the cost crisis.
“No single government, company or organisation can solve this crisis alone. It requires a collective response commensurate to the situation and the Scottish Government is now treating this situation as a public emergency.
“There was clear consensus at today’s summit that energy customers simply cannot be expected to carry the burden of further price rises in October, and that the UK government must now commit to freeze the cap for all households and to support the energy companies to deliver that."