Businesses calling for urgent government support amidst soaring energy bills

Businesses in the South West of England are calling for the government to provide urgent support as energy bills skyrocket.

Recent respondents of Business West’s current Quarterly Economic Survey are facing over threefold increases in their utility costs.

Richard Angell, owner of Angell Pets in Hucclecote in Gloucestershire has just this month had to move his stock out of his display freezers in the shop into a storage freezer because they were costing him £60 per day to run.

In May 2021, Angell Pets' energy bill was £350 pounds and by May 2022 this had risen to £1100, an increase of over 300%. As winter approaches, the company fears that it could reach around £2000. 

Richard said: 

“We have had to shut down some of our vivariums used for keeping different types of reptiles as one vivarium costs £1.50 to run per day and we’ve got 10 of them.

“The next step for us would be to stop selling reptiles and frozen food, which is basically half of our business.

“Most of our money is going to electric companies and paying back our COVID loans.

“The government needs to do something. All they're doing is capping energy costs for residents and doing nothing at all for businesses.”

Lee Strickland, owner of Cohort St.Ives, a budget hostel in Cornwall, is also facing soaring energy bills as they’ve risen from £7000 to £23,000 a year, around 300%.

Her business aims to provide affordable accommodation for school children and families with lower incomes and she is now having to raise her prices and turn away custom during the winter months. This is because it's not cost-effective for them to open and heat the building for less than 20 people.

She said:

“It’s damaging from a business perspective to be turning down business when we've spent years campaigning about how a winter trip is more affordable and inclusive.

“The government needs to support small businesses by introducing an energy cap for those with a turnover of less than £5m. This would mitigate against redundancies and price increases as well as deliver more in terms of VAT-able revenue. 

“Businesses like ours shouldn't be turning down business because it's not cost-effective to switch the heating on."

Shaun Vining, Founder and Director of Complete Meats, a butchers based in Axminster in Devon, said:

“We are suffering a downturn in turnover and an uncontrollable increase in all expenses. 

“This, along with extra energy costs is taking away any profits that are forecast, swallowing any money made the business.

“Support is urgently needed to mitigate the extra unreasonable energy increases. This could be in the form of grants to offset the extra costs incurred between 2021 to 2022.

“Loans will not be an option for many businesses because all this does is put the company in more debt which would just delay the businesses demise. 

“The government need to act now, or we will find many having no choice but to close down.”

Phil Smith, Managing Director of Business West, appears on BBC Points West talking about the energy crisis and the challenges facing firms

Phil said:

“The new Prime Minister needs to act fast for businesses and we hope that Thursday’s announcement will provide much needed support and clarity for firms. 

“An energy price cap for firms is imperative as it will mitigate the massive and unplanned rise in the cost of doing business, which may well ruin many firms. A price cap will also allow businesses some certainty about how and when their bills will increase and hence they will be better able to plan their cash flow and hopefully remain profitable.

“Particular support needs to be provided for smaller businesses who are more vulnerable to sudden exploitative price increases from their supplier.

“Longer term incentives are also needed for businesses to reduce their energy consumption and boost efficiency. This could come in the form of grants and loans to finance low carbon investment including insulation and micro renewables.

“Our current Quarterly Economic Survey is asking businesses to tell us what the incoming government can do to support them during this crisis. We would urge firms to complete this so we can we represent and speak for businesses in our work directly (and through the British Chambers of Commerce network) with key decision makers, such as Ministers, MPs, and the Bank of England.”