by Roger House, Federation of Small Business chairman, Kent and Medway region

If you have the energy to read this, you will be aware of the electrifying news that energy costs have, predictably, gone up again.

I emphasise the word “predictably” as the rise is synchronised with the run-up to the season with greatest demand. My friends and family confirm my warnings many years ago that although private sector management may be preferable to a nationally owned utility, we should hold ourselves ready for a spiralling cost increase – not wholly based on production margins but on a mix of government interference and shareholder satisfaction.

I have not been wrong.

This must be one of the hottest topics in the political spectrum, especially as part of the problem can be laid firmly at the foot of government and the execution of its green policies which may need a radical review.

As consumers, our bills include additional elements to pay for environmental levies. Everyone is faced with these growing costs - private individual, local authority and all public services; all levels of commerce and industry, and of course government itself.

The FSB has been looking at the whole spectrum of energy and is expending considerable effort in preparing a major report on the matter. Looking at the report’s early briefings, one consideration that springs to the “business” mind is the call for radical changes in the regulation of energy companies.

'Behind all this is the fact the UK faces decision time when it comes to energy security'

The consequence of that must result in improved competitiveness of the retail energy market for the small and micro businesses – let alone domestic users. Behind all this is the fact the UK faces decision time when it comes to energy security. Incentivising investment in a sufficient new base load generating capacity and deciding what role renewables have to play in our energy mix are critical decisions that have to be made.

There will be a substantial loss of generating power during the next decade as coal-fired capacity closes around 2015 and most nuclear power stations reach the end of their productive lives.

The key issue is the gap between investment being made and that needed to modernise the power grid and create new power generating capacity. Whatever the outcomes, we must pay due diligence to affordability as well as availability.

There has to be a strong and collaborative message from both the private and public sector to Government to get a grip on this issue. Things have begun to look rosier in the economy, let’s not erode that with poor energy policies. We may well have to wear more jumpers over the cold periods, but there can be no
woolly thinking by governmen.
If the next suggestion is “let them wear polyester,” at least the static electricity might contribute.