Providing firms with clarity on the new energy-support package must be top of the UK Government's agenda for the new year.

That was the message today from the director general of the British Chambers of Commerce (BCC),

Shevaun Haviland was speaking as the BCC's quarterly economic survey for the last three months of 2022 shows key economic indicators remain at concerningly-low levels, following significant declines in Q3.

The director general said: "The outlook from businesses remains bleak. Now, more than ever, we need to create the right conditions for firms to invest and grow.

"Providing businesses with clarity regarding the new energy-support package must be top of the government's agenda for the new year, after it failed to do so before Christmas."

Detailed information

No detailed information about what the fresh package will mean for individual companies has been revealed as yet - or even exactly when the announcement will be made.

The director general also went on: "We urge government to promote business growth by investing in public infrastructure and incentivising international trade, with a particular emphasis on making the UK the global hub for green innovation.

"Barriers to trade must be removed in order to allow firms realise their full trading potential. The impasse over the Northern Ireland protocol continues to loom and the UK Government must work with the European Commission to reach a negotiated solution on its business-compliance burdens.

"The Government's new year's resolution should be to put business support for SMEs at the heart of its agenda and get the UK back on the road to recovery."

The BBC said yesterday that business groups expect government help with their energy bills to be halved after March, when the existing package of support expires. But it is thought heavy energy users will get support close to current levels.

'Lower level' of support

Chancellor Jeremy Hunt told business bodies on Wednesday that the support would be at a "lower level" to protect the public finances from volatile energy markets.

In October, the government said it would review the scheme due to its high cost to taxpayers, with officials considering options to extend support only for "vulnerable businesses".

A decision on whether to extend the support had been due before Christmas, but the government postponed it until the new year. The revised scheme is expected to run for 12 months until March 2024, with details on the level of support next week.

Firms and business groups reacted angrily to the delay, with Kate Nicholls, chief executive of UK Hospitality, describing it as having "a corrosive effect on business confidence".

Findings of today's BCC's economic survey for Q4 of 2022 include:

  • Business activity not experiencing any bounce back from significant fall in Q3
  • Confidence remains at Covid-crisis levels
  • Little sign of plans to increase business investment
  • Inflationary pressures remain top concern  

David Bharier, head of research at BCC, said:  "These results provide further confirmation that business conditions deteriorated significantly in the second half of 2022.

"The situation remains critical for the majority of SMEs who find themselves cut adrift by monumental inflationary pressures, often driving triple-digit percentage cost increases, particularly on energy.

Confidence

"Business confidence remains worryingly low, with only a third of firms reporting improvements to sales, and less than a quarter reporting increased investment. The widespread economic damage caused by Covid shutdowns has been compounded by subsequent inflation, global trade crises and new trade barriers with the EU. For many SMEs, the cost of doing business is now simply too high.

"While the change in (UK Government) administrations from Truss to Sunak may have stabilised markets, the autumn statement appears to have had no impact on business confidence.

"Indeed, while inflation is still by far and away the top concern for businesses, taxation has now become far more of an issue for SMEs.

"These results reaffirm the need to create a stable environment for businesses to invest, with energy, improvements to infrastructure, access to skills and removal of trade barriers, particularly with the EU, all top priorities for firms."

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