Soaring energy costs may lead to business shutdownswritten by Bella Palmer
Under pressure, 60 percent of surveyed manufacturers said the increased energy costs are now "business threatening", MakeUK said in the poll report
British manufacturers warned the soaring energy costs may lead to business shutdowns and called for the government to lighten the burden, according to a poll conducted by MakeUK, a manufacturing federation, published on Saturday.
The energy costs have spiralled out of control, with nearly half of surveyed enterprises reporting their electricity bills have doubled in the past 12 months and 53 percent of them expect the same fate in the coming year, according to the poll.
Under pressure, 60 percent of surveyed manufacturers said the increased energy costs are now "business threatening", MakeUK said in the poll report.
The report also warned that about 12 percent of manufacturers have already made job cuts and more drastic action such as wider redundancies and complete shutdowns will be needed if the expected price hikes of over 50 percent materialize in the next 12 months.
The federation said that the high energy prices are no longer just an issue for energy-intensive industries, but also cast a shadow over manufacturers of all sectors and sizes.
Therefore, it called on the government to scrap the Carbon Price Support, a levy only UK businesses pay, and consider introducing an Industry Price Cap to freeze energy bills at an agreed rate.
The government must step in to help struggling businesses, cashflow is already stretched to the limit, to pay what are now exorbitant energy bills by supporting sustainable factories and move further away from National Grid reliance, said Stephen Phipson, CEO of Make UK.
The soaring energy prices are also felt by families. The Financial Times reported last week that average household energy bills in the UK for each year will rise above 3,500 pounds in October and could exceed 6,000 pounds by April, compared with 1,971 pounds a year ago.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.