Rising fuel costs raise concerns for economic growth
High fuel bills are stifling growth in the North East, according to research carried out by the North East Chamber of Commerce (NECC).
High proportions of NECC members felt that increases in transport costs were the result of rising fuel prices, and this had a negative impact on business.
Over a third of NECC business members agreed that higher energy costs had produced a detrimental effect on growth, while 64% said transport was significantly more expensive that it used to be. Burdensome regulations were also cited as a reason for restricted growth in the region.
NECC Policy Advisor, Mark Stephenson commented: “Core energy costs have increased for all businesses 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 Chamber published these findings on Monday ahead of the Government’s Energy Bill, which is expected to outline investment into the energy sector over the next few years.
Mr Stephenson added: “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. It is also important that the Government recognises that awareness of its flagship Green Deal is worryingly low.
“More must to be done to support businesses seeking to lower energy costs and indeed their carbon footprint.”
Surprisingly, only 44% of companies said they knew about the Government’s Green Deal, which hopes to improve energy efficiency within UK businesses and households.
Just under three quarters of businesses, said they had developed plans to manage their energy usage, while 23% were confronted with unexpected rises in fuel prices in the past three years.
Mr Stephenson concluded: “It has to be remembered that transport costs and fuel prices hit us in the North East particularly hard because we have further to travel to get to key markets in the UK and overseas.
“Sluggish growth is rightly the number one issue in David Cameron’s in-tray at the moment. It is only right that anything seen to be stifling growth must be addressed.”
This was posted in Bdaily's Members' News section by Miranda Dobson .