LAST week, the Regulator Ofgem announced its new domestic energy price cap would rise by an unprecedented 80 per cent in October, taking the average domestic bill in England, Wales and Scotland to £3,549 a year, writes FUW president Glyn Roberts.

Ofgem boss Jonathan Brearley has admitted the rise will be "devastating for many families", while money expert Martin Lewis has said lives will be lost this winter without more government help.

It is quite right that there has been so much focus on domestic energy prices and the need for government intervention to help families.

But what has attracted far less attention is what energy prices will look like for businesses, which in the UK do not have prices capped.

Cornwall Insight, which provides energy market intelligence and analysis, has estimated that businesses entering new contracts in the autumn will have to pay more than four times what they were paying in 2020, prompting the British Chambers of Commerce to write to the government with a stark warning about the impact, and the Federation of Small Businesses to say that “if we don’t address the ‘cost of doing business crisis’ we’ll keep on seeing costs being passed on to hard-hit consumers, or even worse people will lose their jobs".

Back in January, the FUW warned that the situation for businesses was already dire, with a letter to Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng highlighting that dairy farmers in Wales were already facing increases in energy costs of up to £1,000 a month, on top of huge pressures due to increased costs for inputs such as fertiliser.

Back then, the FUW called on Mr Kwasi to implement policies which would negate the severe impacts of rising energy prices for Welsh and UK businesses.

Since then, Russia’s war on Ukraine has led to staggering increases in energy, fuel, feed and fertiliser costs, escalating what were already serious problems in January to crisis levels.

Last week, CF Fertilisers UK announced it would temporarily halt ammonia production at its Billingham Complex due to the massive hike in production costs, having already announced the closure of its Ince site in June and had emergency Government interventions in 2021.

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CF Industries produces 60 per cent of Britain's carbon dioxide supplies as a byproduct of agricultural fertiliser production, meaning the halt will have implications throughout the UK food production chain, adding to existing pressures on food production prices and food price inflation for consumers.

In July, the FUW launched its Five Point Plan for UK Governments aimed at relieving pressures for farmers, food producers and consumers in the immediate term, while bolstering our food and energy security in ways which reduce the dangers of future exposure to global emergencies. 

The plan highlighted the fact that countries across the EU have announced support packages worth hundreds of billions for businesses suffering as a result of massive price rises, and that, by comparison, the support provided in the UK has been negligible.

Our businesses are facing an unprecedented emergency that will add to the woes of consumers and domestic households unless something is done urgently. To mitigate the disaster Sunak and Truss must provide solid and meaningful proposals to support businesses that will be enacted as soon as the leadership race is over.

Further severing economic ties with nearby trading nations while handing over control to countries on the other side of the globe should definitely not be a part of that plan - even if it was before.