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The Director of the Small Firms Association, Patricia Callan
has stated that the announcement by the Commission for Energy
Regulation (CER) of interim electricity price increases of
17.5% from 1st August, is completely unacceptable to the small
business community.
�Three weeks notice that a major input cost is going to increase
by such a large amount is ridiculous� - commented Callan.
�Is the energy regulator intent on putting more companies
out of business and more employees on the dole?�
She added - �Energy is complementary to the rest of the economy.
A failure to supply energy at competitive prices adds costs
to businesses operating in Ireland, with consequential effects
on business competitiveness. It is incredulous that, at a
time when every economic report on the Irish economy stresses
the need to reduce costs, increase productivity and regain
competitiveness, Irish businesses are again being undermined
in this way.�
Callan said that - �this type of decision has now become
the hallmark of the regulation of the Irish public utility
sector. The consequences of this decision will be severe and
will undermine the exposed sectors of the economy, increase
the already high inflation rate of 5%, add to raw material
costs and will critically impact our manufacturing sector.
Competitiveness is critical to the survival of all Irish companies
and energy price is a key input indicator.�
Even before this announcement, in the SFA�s 7th Annual Business
Survey (Click
Here), energy costs emerged as the third most significant
issue (after labour costs and inflation) in terms of business
costs - being cited as the No. 1 Business problem by 9.7%
of respondents - and as a major business problem by 66% of
small businesses.
�The small business community urgently requires a business-friendly
energy policy - which ensures the secure, reliable, efficient
and competitively-priced delivery of energy, as a key ingredient
for successful and sustainable growth of businesses, competing
in a global marketplace.�
The Government coffers have reaped significant benefits from
VAT and excise duties collected on foot of the increasing
oil and energy costs being paid by small businesses. �In Budget
2009, the Government must address these issues by reducing
excise and VAT rates on energy and by providing enhanced capital
grant aid and/or tax credits for energy-efficient investments.�
Concluding, Callan stated - �the current model of energy
market liberalisation has not alone failed, but has also added
significant costs to Irish business. This proposed increase
in electricity prices is simply unacceptable to the small
business community. There is little or no effective competition
in the energy supply markets in Ireland for small businesses.
"In addition, investment in energy infrastructure must
be financed in an equitable manner to ensure that customers
of today are not paying for the benefit that will also be
derived by future generations. We need to see some equity
in this system, some competition in the system - but all we
get are price increases.�
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