There are no invectives left: catastrophe, destitution, economic disaster – all these and more have been deployed in abundance these past weeks as the energy crisis deepens while the Conservative party chooses its next leader.
Liz Truss is widely expected to win the mandate, but regardless of who is confirmed on Monday as the UK’s next Prime Minister, the first words out of their mouth must be a detailed account of plans on how to make it through the coming winter. Failure to do so would be immorally negligent.
Trade body Scottish Engineering warned yesterday that the industry is already in crisis as some companies with full order books have still been forced to seek advice on voluntary liquidation because they can’t afford to power their operations. In one case, a firm with less than 50 employees has been told its energy bill is set to rise from £15,000 to £80,000 per month.
Faced with staggering cost increases, activity in the UK’s manufacturing sector has plunged into negative territory for the first time since March 2020 when stringent Covid lockdown measures were in place. The decline from 52.1 to 47.3 in the CIPS Manufacturing PMI for August was the biggest since November 2008, when the UK was at the height of the banking crisis.
READ MORE: Scotland faces “industrial energy crisis” as firms’ power bills soar
Economist Thomas Pugh at RSM UK said the data suggests the sector is already in recession, leading the way into a broader economic downturn that the Bank of England expects to take hold in the fourth quarter of this year and last through to the end of 2023.
The British Chambers of Commerce has said businesses “will close their doors this winter” if they are not given swift support with soaring energy bills. Earlier this week the leaders of six of the UK’s biggest brewers and pub groups spelled out in stark terms the devastating impact should energy costs go unchecked.
They are by no means alone, with representatives from virtually every trade and industry body calling for immediate government action to help fend off the worst of what will be a grim winter.
Chancellor Nadim Zahawi has tried to assure anyone who will listen that despite all appearances of a government in suspended animation, the Treasury is working flat-out behind the scenes on plans to help consumers and businesses this winter.
READ MORE: Business braces for a year 'as tough as Covid'
Energy UK has put forward proposals to decouple the price of electricity from that of gas, meaning that electricity generated from lower-cost sources such as nuclear, solar and wind power could be charged at a lower rate. It is estimated this could save households between £150 and £250 per year.
ScottishPower chief executive Keith Anderson has called for the establishment of a deficit fund to temporarily cover the difference between what people pay and how much it costs to supply them, with the shortfall underwritten by the government and repaid over the long term by consumers.
Ovo has put forward an alternative solution that involves reducing the price of energy for domestic users, but only for a limited number of units per household, with energy consumption beyond that level charged at a higher price.
So there’s no shortage of potential remedies, which is good. With the domestic price cap set to surge further and companies facing up to a nine-fold increase in their bills, it will take more than a single silver bullet to keep this beast of a crisis at bay. It’s now time for political leaders to do the heavy lifting.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel