Harrogate’s independent business sector welcomes new Government support with a warning

Although the Government’s fresh announcement that electricity costs for UK businesses, charities and public sector bodies are to be capped for the next six months was broadly welcomed in the town, Harrogate traders say they need medium to longer term help - and more of it.

David Simister, chief executive of Harrogate District Chamber of commerce, said: "Today's announcement by the Government is extremely welcome, and there will be many businesses breathing a temporary sigh of relief.

“Over the last few weeks we have seen businesses pull the shutters down because of rising energy costs, and I hope today's intervention will prevent many more from doing likewise.

"I am hopeful the mini-Budget will further take into account the needs of businesses.”

The Department for Business, Energy and Industrial Strategy said today that electricity prices will be capped at £211 per megawatt hour, while gas prices will be capped at £75 per MWH from October 1 this year to March 31, 2023 and will apply to contracts signed since April 1.

Paul Rawlinson, co-director of Baltzersens Ltd, the award-winning Scandi-inspired cafe and bakery on Oxford Street, said the Government needed a thorough look at the costs of doing business in Britain.

"Times are challenging for hospitality at the moment and there has been little respite for the industry since March 2020," said Mr Rawlinson.

"At Baltzersen's we're making lots of changes to try and operate as efficiently as possible amidst a backdrop of increasing energy prices and the knock-on effects of the war in Ukraine on ingredients and other expenses.

"In terms of relief from the UK Government, we'd echo calls from industry trade bodies, such as UK Hospitality, for business rates to be scrapped for the rest of the year and a reduction in the rate of VAT from 20% to 12.5%.

"These measures would keep cash flowing for businesses that are struggling to keep their heads above water."

Simon Midgley, director of Murmuration Ltd which runs Starling Independent Bar Café Kitchen on Oxford Street, warned the problem was not a six-month one.

"We need clarity on the exact support being provided so we can confidently plan into 2023 to thrive in the long term and not just survive for the next for the next six months.

"Looking at this as a short-term problem would simply put off the same critical financial position for six months down the line rather than putting in place solutions to allow solid businesses to trade themselves out of it.

"I don’t expect hand-outs like we had during Covid times, but incentives to trade our way back to stability.

"Measures such as immediately reducing the VAT rate on both food and drink and cancelling business rates for the remainder of the fiscal year would give us breathing space.

"By applying the VAT reduction to drink as well this time, that would support all of the sector."

Prime Minister Liz Truss is also expected to cut taxes as well as stamp duty in what she says is an attempt to drive economic growth in the UK.

But her economic approach was rejected in a meeting with US president Joe Biden who attacked “trickle-down economics”.