Caught between a rock and a hard place

UK businesses are being squeezed from all sides at the moment. On top of higher wages businesses, unlike UK households, have received no help with their energy bills, writes Mervyn Pilley

 

One of the key things of running a trade association is the need to keep reminding oneself that your members are businesses and consequently they may all need business support in addition to sector specific support.

One of the true ironies for me at the moment is that I am running a trade association based on energy efficiency, but that one of the current blocks on member recruitment is the ever-increasing costs that all businesses are incurring including, of course energy.

While there are limited ways that we can directly support members with these additional costs it has been hugely disappointing to see how little government support so many businesses are getting, especially when compared with the support recently announced for households and their energy bills. I am aware of course of the argument that UK businesses received huge support from the Government during the pandemic but what tends to be forgotten is that a large number of SMEs where dividends rather than salaries to the owners are paid effectively received nothing. The same applied to the majority of self-employed people turning over enough to make a living.

Businesses are between a rock and a hard place at the moment. The Governor of the Bank of England has told businesses that they should not fuel inflation by putting up their prices. However, at the same time certain trade unions are telling their members to seek pay rises to cover their increasing costs. As businesses are coming out of a pandemic that has sapped most companies’ reserves it is unrealistic to expect businesses to absorb extra costs and not pass them on to their customers.

One specific business cost that is especially relevant at the moment is training. As I have mentioned in previous columns the majority of the retrofit installer supply chain is provided by SMEs. The Government still needs to sort out the apprenticeship grant levy scheme where the numbers of apprenticeships are going down. In addition, SMEs have always struggled to take on apprentices. The critical key to both transitioning jobs into the green space as well as levelling up policies around the UK is in retrofit and SMEs will take on new people only if there is a degree of policy certainty. In our energy efficiency manifesto last year, we recommended that the Government should direct fund at least 75 per cent of the training costs for people to be trained to be retrofit installers. The failure of both the Green Deal and the Green Homes Grant schemes clearly illustrate what happens if the support of the SME installer sector is not taken seriously. The result is that there will never be enough capacity in the UK market to carry out the required work. As I read about companies promising to create an army of installers, the cynic in me feels that the army already exists, it just needs to be fully supported with direct funding for training costs.

On the subject of our manifesto, I am pleased to confirm that we are updating this and plan to include the revised version in our energy efficiency yearbook. The publishing date for this publication – part of our 40^thanniversary celebrations – is anticipated for July. As I work on the document, I need to stay positive, putting to one side my major concern about whether the current government has any real interest in listening. Cynical, I know, but as someone who has spent more than 20 years lobbying governments of different colours, I can honestly say that the listening skills and ability to absorb genuine advice of the current one seems to be highly restricted.

As 2022 develops it has felt good to start returning to face-to-face activity again. Last month we held our first EnCO conference in London which proved to be a highly successful event, reiterating the critical part that behaviour change has to play in enhancing energy efficiency solutions. This month we are hosting an energy efficiency zone at the Installer Show at the NEC. We will also be holding our first physical members meeting for more than two years during the event.

Unfortunately, the increased business costs I have already referred to earlier are also proving to be a major challenge in organising such events. ESTA was built on its events and the resulting networking opportunities and two years of virtual activity has thrown up considerable challenges for us. I am pleased that applications for membership have started to come in again and we have also started to re recruit some of those lost members who left us during the pandemic. I am only too aware that in addition to membership fees, training is another area that often suffers when businesses have to cope with increased costs. That said we continue to look to develop new training products. With so much churn in the energy sector jobs market there has never been a more urgent need for personal development and learning. We will continue in our quest to be a resource for energy efficiency knowledge.

• Mervyn Pilley is executive director of ESTA (Energy Services and Technology Association)