25th October 2021

Energy crisis placing “enormous” pressure on Scottish businesses

Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce (SCC) has warned that Scottish businesses are being placed under “enormous” pressure by the rising cost of energy. Ahead of the UK Government Autumn Budget, Dr Cameron has written to the UK Chancellor Rishi Sunak MP, calling for the introduction of a Small and Medium Enterprise Energy Price Cap to protect Scottish businesses from the increasing price of gas and electricity ahead of the winter months.

One Scottish hotel group, The Caithness Collection, which operates across the north Highlands have reported a potential rise of £53,170 per year in electricity costs as they move to a new contract, the equivalent to a 70% increase on their current yearly bill.

An SME Energy Price Cap could include firms transferred to new providers to strengthen the ‘reasonable costs of supply’ limit at present, and firms locked into enforceable multi-year contracts.

Whilst the current domestic price cap(s) came about following a prolonged CMA investigation, SCC have asked the UK government to look carefully at this option as quickly as possible.

Commenting, Dr Liz Cameron, Chief Executive of SCC said:

“In the past few weeks, the UK has reached a crisis point over gas and electricity prices, and businesses are feeling the consequences.

“Many businesses in Scotland are still operating in survival mode and continue to recover from the dual challenges of the UK’s departure from the UK and the impact of the global coronavirus pandemic. It’s impossible for firms to keep pace with these exorbitant rises in energy prices and these cost pressures are putting many businesses under enormous pressure and resulting in these rising costs pressures increasingly being passed onto the consumer.

“The UK Government need to support business recovery over the winter months and SCC believe there is now a clear case to create an SME Energy Price Cap, including for microbusinesses, to protect smaller firms from some of these price increases which they would otherwise face.”

Commenting, Trudy Morris, Chief Executive of Caithness Chamber of Commerce said:

“The Scottish and UK economy remains in a fragile position and there are mounting challenges for businesses across sectors being created by inflationary pressures, labour market shortages and supply chains, an SME Energy Price Cap would take away one of these pressures and place business recovery on a firmer footing.

“Hospitality and tourism are key sectors for areas like Caithness and it’s vital that government, at all levels, use all the economic levers at their disposal to ensure businesses are able to recover during the winter months and not have a return to growth derailed by rising energy prices.”

Commenting, Andrew Mackay, Owner of the Caithness Collection hotel group said:

“The hospitality sector was one of the hardest hit throughout the pandemic and recovery is already proving challenging, with difficulties finding and retaining staff, increased wage demands, other supply chain issues and tax increases.

“Rising energy costs are creating huge burdens and challenge for the business and it’s vital that Scotland’s businesses are afforded some buffer to guard against energy prices that are hitting them hard.”

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