Earlier this week the Chancellor of the Exchequer announced that the financial support that has been provided for energy usage by businesses over winter will come to an end on 31st March, with a heavily watered-down package taking its place. But the pan-European energy crisis continues to significantly affect the economy, as well as have a wider impact on geopolitics and climate action, according to new polling by FleishmanHillard on global business leaders’ views about the challenge and solutions.
To be fair to Jeremy Hunt, the support the government has provided over a 6-month period has cost the Exchequer, and the taxpayer, an eye-watering £18bn. The new scheme, set to run until April 2024 is capped at £5.5bn; a sizeable reduction.
Hunt proclaimed “Wholesale energy prices are falling and have now gone back to levels just before Putin’s invasion of Ukraine”, whilst selling the replacement package as providing reassurance to businesses and allowing them to plan ahead. And planning is exactly what they are doing.
FleishmanHillard’s new energy research is a behemoth of insight into global responses to the energy crisis, its implications on the climate, and the wider economic outlook for 2023, surveying 900 business leaders across China, France, Germany, India, Italy, South Korea, Spain, the UK and the United States. Some of the responses will make for uncomfortable reading at the Treasury.
79% of global business leaders reported that the EU energy crisis will have an impact on their business, with a majority in the UK foreseeing a very large (18%) or large (39%) impact.
Meanwhile, 74% of UK business leaders considered it likely their company will increase the price of goods/services, and a majority of global respondents said that increased poverty is the most likely outcome of the energy crisis.
With the Chancellor announcing that his “top priority is tackling the rising cost of living”, this will not be a welcome message.
However, the survey was not all bad news.
Business leaders reported wanting to find new energy sources to provide heat and electricity, whilst also retaining commitment to climate goals.
In the UK, 65% of respondents want to increase investment in renewables to address the energy crisis, and globally manufacturing reported an intention to rely on renewable energy to maintain sustainability goals, while professional services sector leaders will change work-from-home policies.
Business leaders need not stay quiet about the challenges they face from the energy crisis. The Chancellor has asked OFGEM for an update on their review of the non-domestic energy market in time for the Spring Budget, so there is still a window of opportunity for companies to have their voice heard in the political arena.
FleishmanHillard can help drive your business in developing the most impactful tone for your messaging and plans for strategic engagement with the Government, to support the policy change you require and impress the need for urgent solutions. Get in touch to discuss how we can help.
Tim Harding, Associate Director and International Trade Lead
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November 20, 2023
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