Make UK: Out of control energy bills are now business threatening for 60% of manufacturers – up from 8% just four months ago
Posted on 13th September 2022
Government must immediately scrap the Carbon Price Support – a levy only UK businesses pay and look at introducing an Industry Price Cap to freeze energy bills at an agreed rate.
42% of manufacturers surveyed said that their electricity bills have increased by 100% in the past 12 months and 32% said that gas prices have increased by over 100% in the past year
Over half (52%) of companies expect their electricity costs to further increase by over 100% in the next 12 months and 42% expect to see their gas prices increase by over 100%
Almost six in ten say that increased energy costs are now business threatening
13% are now reducing their hours of operation or avoiding production during peak periods and 7% are stopping production for longer periods.
A worrying 12% have already made job cuts as a direct result of increased energy bills
Manufacturers say that if bills continue to increase and prices rise by over 50% (which they expect in the next 12 months) more drastic action such as shutdowns and redundancies will become inevitable
Britain’s manufacturers are warning that their energy costs have already spiralled out of control, with nearly half reporting that their electricity bills have shot up by over 100% in the past 12 months and 53% expect the same fate in the coming year. The current crisis is leaving businesses facing a stark choice – cut production or shut up shop altogether if help does not come soon. A worrying 12% of manufacturers have already made job cuts as a direct result of increased energy bills, but admit that more drastic action such as full shutdowns and wider redundancies will be needed if the expected price hikes of over 50% materialise in the next 12 months.
High energy prices are no longer an issue for energy intensive industries only, the impact is being felt across manufacturers of all sectors and sizes. Companies have attempted to mitigate against this with 58% already adjusting business practices to reduce energy consumption by insulating buildings and installing better performing heat systems. And over half have already priced in the increases into their final product. Some 13% are now reducing production for short periods or avoiding production altogether during peak energy price periods, with 7% reducing production already for longer periods in the day. Over a third of firms are actively searching for a new energy provider and two fifths have renegotiated a fixed tariff for the next year.
To view the full Make UK article, click here.
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