BUSINESS leaders in Newport and across the UK have warned of mass closures and redundancies unless effective action is taken to combat spiralling costs.

The warning comes from the newly formed #BusinessSOS campaign, founded by organisations representing more than 150,000 retail, leisure, hospitality and tourism businesses – including the Newport Now Business Improvement District (BID).

On September 8, prime minister Liz Truss announced an ‘energy price guarantee’, which included a six-month scheme for businesses and other non-domestic energy users (including charities and public sector organisations like schools) which will offer the “equivalent support” as is being provided for homes.

After the initial six-month scheme, Ms Truss said the government will provide “ongoing, focused support for vulnerable industries”, with a review scheduled in three months to consider which industries are most in need of support.

However, the #BusinessSOS campaign has warned that harm caused by the spiralling energy crisis is superseding the pandemic with the potential to cause irreversible damage to UK high streets and the economy.

The campaign set out a three point plan to help businesses through the coming months.

It called on the government to reduce VAT – with headline rates reduced from 20 per cent to 12.5 per cent, and on business energy bills from 20 per cent to five per cent to match domestic billing.

The campaign also called for a 100 per cent rate relief until March 31, 2023; as well as an energy rate relief offering a discounted kwh price on all business energy bills.

Parliament is currently not sitting following the death of Queen Elizabeth II, and another break is due from September 22 to October 17 due to the party conference schedule, although this may be cut short.

Kevin Ward, manager of Newport Now BID, said: “We have already seen some small businesses, particularly in the hospitality sector, closing their doors in the last few weeks due to spiralling costs.

“One of the services we offer as a BID is a Savings Advisory Service that helps our 500+ members save money on their energy, telecoms and other bills and we’ve helped save city centre businesses more than £25,000 in the last year.

“Many of our members have also benefited this year from a combined 75 per cent reduction in their business rates under schemes run by Welsh Government and Newport City Council.

“However, much more is needed and it is only at UK Government level that this can be done. We are supporting fully the #BusinessSOS campaign and we hope the new prime minister listens to the voice of business.”

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Matthew Sims, founder of #BusinessSOS campaign and chief executive of Croydon BID said: “The new prime minister has days to save the high street as we know it.

“To say the energy crisis is worse that the pandemic is not an understatement, it is the reality facing businesses today.” 

And Kate Nicholls, chief executive of UKHospitality, said: “The hospitality sector is crucial to delivering the business-led growth the new government is striving for, but we are facing an existential crisis due to soaring energy bills.

“We’re encouraged by the new prime minister’s commitment to tackling energy prices, but we need to see urgent, comprehensive action.

“As well as a price freeze, we need to see a cut to VAT and a business rates holiday if businesses in the sector are to have any hope of making it through the winter.”