Energy costs stifling growth

Energy costs are stifling growth across the North East, according to a study by the region’s largest business membership organisation.

On the day that the long-awaited Energy Bill is published, the North East Chamber of Commerce has released the results of a survey which it says shows why business needs remain at the heart of government energy policy.

NECC’s Energy Survey demonstrates rising costs are adversely affecting business growth, it says, and that the Government must ensure that the Bill clearly demonstrates benefit to businesses, growth and jobs.

A poll of its members found that 35% of businesses felt increasing costs impacted on business growth, 64% of respondents reported that transport costs have increased significantly, while 23% have received an unexpected increase in the last three years.

Meanwhile, 76% of respondents said they have some form of plan in place to manage their energy usage but only 44% said they were aware of the Government’s Green Deal.

NECC policy advisor Mark Stephenson said: “The Energy Bill will hopefully ease some uncertainty surrounding Government energy policy. However, investors in large energy projects often work to timescales of 25 years or more. The Government must understand that support for what are still risky investments must match investors’ timescales.

"This is fundamental if we are to meet carbon reduction targets with secure and affordable sources of energy helping us grow our economy and, ultimately, keep the lights on.

“Core energy costs have increased over the past three years. Equally worrying is the increasing volume and complexity of regulations affecting businesses generating or reliant upon large volumes of electricity. This is damaging North East and UK competitiveness.

“The North East is an energy intensive region because it has thriving manufacturing and engineering sectors. Current policy is effectively punishing us, which is nonsensical given we are trying to rebalance away from an over-reliance upon the service sector.

“The Government must now seek to ensure that energy policy supports rather than punishes growth.”