Although the Government are putting support in place, it is simply not enough to save face.
Energy providers are increasing their costs – a knock-on effect known all too well from the crisis. We asked 1,010 businesses during October how they felt about the current economic situation and what they think the future will hold.
Almost half (45%) of UK businesses state that rising energy prices are the most significant challenge they’re currently facing. Overall, 76% say that the rising energy prices will have a negative impact on their business as a larger portion of profits will have to go towards energy bills.
Data from the Business Tracker also highlights that almost 9 in 10 (89%) businesses agreed the impact of the energy crisis will bring challenges to their normal operations.
This month, the Energy Bill Relief Scheme commenced for UK businesses, compensating organisations with £211.00 per megawatt-hour (MWh) for electricity and £75.00 per megawatt hour for gas. Regardless, 2 in 3 businesses (62%) agree that in they will see an increase in charges over the next year. Showing that although the Government are putting support in place, it is simply not enough to save face.
When surveyed, almost half (45%) of businesses stated that they would trust a Labour Government more than the Conservatives to manage the UK economy. On top of this, with the appointment of the new Chancellor, Jeremy Hunt, 40% of respondents expressed that Hunt would do a poor job in office. Kwasi Kwarteng received the least faith (61%), a further indication that many are concerned with the Tories’ ability to restore the economy. (Please note this data was collected before Sunak’s administration).
Hunt’s U-turn on the mini-budget during Truss’ leadership saw the Government confirm they will only be providing the energy cap support between now and April, not the 2 years that was initially promised. Subsequently, Hunt saw his biggest support from medium to large size businesses with 26% stating he will do a good job in office (compared to small businesses with only 18% agreeing). Evidently, smaller businesses are feeling more anxious about the future, whilst medium and larger businesses will be less affected by rising energy costs.
What the future holds
Due to the insufficient support from the UK Government on increased energy prices, 82% of those surveyed agreed that the UK should become more energy independent.
Businesses think now is time to make the switch to green, with over three-quarters (76%) stating that the Government should increase investment into renewable energy such as homegrown alternatives to reduce dependence on imported fossil fuels.
As rising energy prices continue to hurt UK businesses and as businesses increasingly look towards a more energy-independent and green future, we and the business community will wait with bated breath to see if any further Government initiatives will be forthcoming to support this transition.
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