Act boldly to save our livelihoods

As we wait for details of the government’s energy plan, the meter is still running, and costs continue to pierce the very heart of some of our small businesses.

Extraordinary times call for extraordinary measures. Nearly two weeks ago, the Prime Minister declared that it was the ‘moment to be bold’ however, the lack of detail on how any assistance scheme will be implemented is causing business owners increasing distress. Without clarification on the practicalities of the plan, there is a grave risk that there may not be enough time left to protect many firms from eye-watering winter bills. Small firms, whether the local grocery store, café, restaurant, or car dealership, are often high-energy users and so are most exposed to soaring prices.

The expectation that the government may reveal in a matter of days how its scheme will work in practice needs to be followed by the immediate action on delivery. Critically, any support needs to cut through the range of factors which determine the cost of business energy contracts. Negotiating different rates with multiple suppliers is a hugely complex process and, on top of that, no two businesses use power in the same way. Such differences must be taken into account.

Whilst the commitment to cap business energy costs is welcome, the proposed six months simply won’t be enough. We need much much more than short term relief. With so many firms at serious risk, sustainable long-term solutions which address underlying problems of supply and affordability is where the focus should be. To support businesses to a point where they will just face the same issues at a cliff edge in the new year is not only illogical but dangerous. Rather, the government should make good on its commitment for comprehensive help for all small businesses that will be fighting for survival. And in all of this, we must ensure that due regard and effective solutions are deployed right across the energy mix, which is different in Northern Ireland from other parts of the UK and will require a bespoke solution.

FSB has been working on a range of measures to propose to government that will help incentivise companies to increase energy efficiency to help future proof against volatility and uncertainties. However, as we saw with the Chancellor’s moves to scrap VAT on energy efficiency investments, the current application of the Protocol might prevent similar measures being applied here. If ever there were an illustration of the urgency of the need to resolve the impasse with Brussels, it is surely this. Creating space for agreed solutions to be developed is in the interest of the government, the EU, citizens across these islands and the climate.

It is clear that the turmoil of renegotiating electricity and gas contracts next month could be eased by the enactment of strong political leadership and the swift delivery of big and bold action; but the absence of either will risk seeing the lights go out permanently on many businesses here.

The extent of the current emergency requires a Covid-style response; one that will help to tackle and not exacerbate the underlying problem. It is crucial that all possible steps 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 NI.

We recognise that there are many interconnected parts and issues. There is a new Government at Westminster, no government at Stormont, massive issues of energy supply and war in Europe with which the EU is grappling, and all the while the unresolved NI Protocol is causing friction and undermining relations. But overarching all of that is the immediate, existential pressures that businesses are facing, so now is the time to urge all politicians to look more imaginatively and creatively at the problems we face and bring a real sense of renewed urgency to the task of finding robust, lasting solutions. Most small businesses negotiate their energy deals in October; it would be unconscionable to delay informing them of what assistance they might get, because such lack of clarity may force them into decisions that will potentially cost them their livelihoods.