NI business leaders react to Prime Minister’s ‘energy crisis’ government package

Following today’s announcement by Prime Minister Liz Truss of a government package to deal with the energy crisis, Northern Ireland business leaders have praised the ‘needed relief to thousands of businesses and households’.

However FSB NI, Retail NI and Hospitality Ulster all expressed their concerns outlining that the government needs to go much further.

In a statement, FSB NI also highlighted a new major report which revealed that almost all local small firms are concerned about rising energy costs. With small businesses having faced eye-watering energy price hikes since 2021, the FSB’s Out in the Cold report lays bare the scale of the current emergency at their doors.

According to latest research, close to two-fifths have seen their energy bills doubled, tripled or even higher. Nearly a quarter of firms have held back from investments and business expansion.

In light of the findings, FSB NI is urging the UK Government and the NI Executive to provide direct financial support and implement regulatory measures to enable small businesses to survive the critical coming winter months.

The FSB proposed package of recommendations includes direct financial support to help with bills as well as a temporary VAT reduction on energy and fuel bills.

This would deliver cashflow benefits to those businesses that can reclaim VAT, reduce costs for micros businesses that are not VAT-registered, and lower bills for domestic consumers.

Ministers urgently need to put in place a rate rebate for small businesses struggling to pay their energy bills.

The establishment of an Energy Stakeholder Group by the Department of the Economy could help to ensure effective engagement with small businesses along a range of energy issues.

They should also work to ensure incentives are in place for the small and microbusiness community to ‘pool’ together in order to benefit from economies of scale when producing, storing and sharing energy.

Alan Lowry, chair of FSB NI’s Policy Board, said: “Given the frequency of the small business closures we have witnessed in recent weeks, it is crucial that all possible measures are taken by Ministers at Westminster and Stormont to share the burden and provide assistance as a matter of real urgency.”

“While national and regional governments can do little to influence global energy markets, they can to a lot to mitigate the worst effects of rising costs and protect the businesses that provide the majority of employment across Northern Ireland.

“It is vital that a package of financial support and regulatory measures is urgently put in place and quickly delivered so that our small businesses are supported and the livelihoods of the thousands of people they employ are protected.

“Small businesses themselves are doing all they can to cut their energy use and cut costs but, without further help, it won’t be enough to save many this winter.

“We need to see comprehensive action and we need to see it immediately – otherwise we will see even more small firms lost forever.”

Also reacting to the Prime Ministers announcement on the energy crisis, Retail NI chief executive Glyn Roberts, explained: “The six-month cap on energy costs for businesses is a positive first step in providing support for our members and it is welcome that the Prime Minister has given a commitment that this will equally apply to Northern Ireland.

“However, Government needs to go much further to provide additional support to small businesses struggling with this energy crisis. This should include Business Rates relief, VAT reductions and the reversal of the National Insurance hike.”

Colin Neill, chief executive of Hospitality Ulster added: “We welcome the recognition for immediate intervention to address the cost of energy crisis by the UK Government. It is critically important that this support announced by the Prime Minister is extended to Northern Ireland where the energy crisis is just as stark. Hospitality businesses across Northern Ireland have been forced to reduce opening hours in the face of severe energy bills over the past months, all while trying to contend with the ongoing Covid recovery. Urgent intervention is needed to ensure that there are no further business closures.

“Further support measures including slashing the VAT rate and a business rates holiday are urgently required to tackle the cost of doing business crisis which is crippling the hospitality sector. We cannot wait any longer for government intervention as we look towards a bleak winter for the industry.

“We will wait for further confirmation that today’s announcement can and will be applied in Northern Ireland and provide much needed relief to thousands of businesses and households.”