Energy prices put 'enormous pressure' on Scottish business

Rising energy costs are putting "enormous pressure" on Scottish firms, and could lead to closures and job losses, business leaders have warned.

The Scottish Chambers of Commerce (SCC) said many businesses were finding it impossible to keep pace with energy price rises after Brexit and Covid.

Liz Cameron, the SCC's chief executive, called for more support for businesses in Wednesday's Budget.

The government said it was monitoring the situation incredibly closely.

Dr Cameron has written to UK Chancellor Rishi Sunak to call for the introduction of an energy price cap for small and medium businesses.

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While there is a price cap for households, there is no such safeguard for businesses, which have to absorb the full impact of rising global energy prices.

This year has seen an unprecedented increase in global gas prices, which have risen 250% since the start beginning of 2021.

Dr Cameron said: "In the past few weeks, the UK has reached a crisis point over gas and electricity prices, and businesses are feeling the consequences.

"Many businesses in Scotland are still operating in survival mode and continue to recover from the dual challenges of the UK's departure from the EU and the impact of the global coronavirus pandemic.

"It's impossible for firms to keep pace with these exorbitant rises in energy prices and these cost pressures are putting many businesses under enormous pressure and resulting in these rising cost pressures increasingly being passed on to the consumer."

She urged the UK government to support business recovery over the winter months.

In her letter to Mr Sunak, Dr Cameron said businesses urgently required support to mitigate rising costs, which she said "threaten recovery and could lead to the permanent closure of businesses and the loss of jobs across Scotland".

According to the Chamber of Commerce, one Scottish hotel group will see a 70% increase on its current yearly bill.

The Caithness Collection, which operates three hotels in the north Highlands, has reported a potential rise of £53,170 per year in electricity costs as it moves to a new contract.

Andrew Mackay, owner of the hotel group, said: "The hospitality sector was one of the hardest hit throughout the pandemic and recovery is already proving challenging, with difficulties finding and retaining staff, increased wage demands, other supply chain issues and tax increases.

"Rising energy costs are creating huge burdens and challenges for the business and it's vital that Scotland's businesses are afforded some buffer to guard against energy prices that are hitting them hard."

A UK Government Department for Business, Energy and Industrial Strategy spokesman said: "The government is in regular contact with the energy industry and Ofgem to manage the impact of high global gas prices and will continue to monitor the situation incredibly closely, including the impacts for small and medium size businesses."

A UK Treasury spokesman said: "The Budget and Spending Review next week will set out how we will continue to invest in public services, businesses and jobs while keeping the public finances on a sustainable footing."