Liz Truss has been announced as the UK’s new Prime Minister. It is vital that she takes immediate action in her role as Leader of the Conservative Party and Prime Minister. The vacuum in power that has been left during the process of electing a new leader has increased the scale of the problems that Liz Truss has inherited and urgent support from her and her new cabinet is a must for businesses. As a result of the vacuum in power, the UK has also fallen further behind competitors such as Germany and France in dealing with the rampant energy costs.
By far the biggest problem is the cost-of-living crisis and how to ease the crushing squeeze on incomes caused by inflation and the inexorable rise of energy costs for businesses. Ms Truss has announced that she will deliver an emergency budget with the soaring energy prices, and this is vital to provide a clear framework of support for businesses as they battle the rising costs and face inherent uncertainty for the future. In her victory speech she said, “I will deliver on the energy crisis, dealing with people’s energy bills but also dealing with the long-term issues we have on energy supply”. This offers cause for optimism for businesses. However, her support plan – expected to be announced on Thursday – will outline Ms Truss’ intentions.
The Chair of the British Chambers of Commerce, Sarah Howard said that “Like households, firms have been telling us of unsustainable rises in their energy bills and how difficult it is to find new fixed term contracts to buffer against further price hikes. Unless the new Prime Minister addresses these problems head-on, then the economy will drift further into dangerous waters and the outlook for both businesses and consumers will be bleak indeed”. The BCC have predicted that inflation will hit 14% in the coming months. Therefore, the government must act urgently to prevent long-term economic damage.
The BCC set out a five-point action plan to support businesses at the end of August and sent it to the Treasury and Liz Truss’ team. It is now vital that the government takes action to protect businesses, livelihoods and allow businesses to flourish in society yet again.
The BCC five-point plan to support businesses includes the following measures:
- Ofgem to be given more power to strengthen regulation of the energy market for businesses
- Temporary cut in VAT to 5% to reduce energy costs for businesses
- Covid-style support by introducing Government Emergency Energy Grant for SMEs
- Temporarily reverse NICs and put money back into the pockets of businesses and workers
- Government to immediately review and reform the Shortage Occupation List (SOL) to help bring down wage pressures and fill staffing vacancies
The Herefordshire & Worcestershire Chamber of Commerce look forward to working with Liz Truss and the government to put business concerns to the relevant bodies to ensure there are short-term measures to help businesses amongst the current crisis, as well as creating a long-term vision to allow businesses to excel in a prosperous economy.