Cost of living: Businesses forced to cut staff as energy prices rise

Some business owners in Northern Ireland have said rising energy prices have forced them to lay off staff in order to stay afloat.

They have made calls for the new prime minister, Liz Truss, to take action to support firms, particularly those in the hospitality sector.

Suggested measures include a reduction in VAT rates and an energy price cap.

Energy bills have skyrocketed this year, with further increases expected for the months ahead.

On Tuesday, gas supplier Firmus Energy announced its prices for natural gas will increase by 56.3% in Northern Ireland.

Several businesses have reported energy price increases of thousands of pounds.

Shane Stewart, who owns El Tapas Gra restaurant in Londonderry, said his gas bill had gone up £18,000 in a year.

"Our electric bill is probably something similar - we haven't got September's yet," Mr Stewart said.

"Looking at our other bills from other places coming through too, you're looking at a £40-50,000 increase by the time October comes, which is very hard to consume for a small business.

Mr Stewart told BBC NI's Good Morning Ulster many businesses were facing a "cliff edge" unless there was targeted support.

"We've now had to take measures where we're going to reduce opening hours and close at lunchtime during the week," he said.

His business is also reducing staff and employees' hours.

"It's very difficult to have those conversations but as a business owner your hands are tied."

A reduction in VAT to a level similar to that in the Republic of Ireland, where the VAT rate has been 9% since the pandemic, would help, he said.

He also suggested a cap in energy-price rises, saying "no amount of saving or cost cutting is going to help reduce the impact" if bills continue to increase.

The BBC understands Liz Truss's government is planning to freeze household bills at their current level - for roughly 18 months.

Under the proposals, energy companies would take out government-guaranteed loans to bridge the gap between the wholesale price and the price they charge customers.

However, this would only apply to England, Scotland and Wales because Northern Ireland has a separate energy market.

Another business owner, Lawrence Bannon, operates hospitality venues in Belfast.

His latest project, Trademarket, utilises former shipping containers to offer low-cost, pop-up units for emerging businesses.

An electricity bill delivered this week for one of his venues saw a monthly increase of more than £4,000.

Mr Bannon described the recent price hikes as "very worrying". He is preparing cost-cutting measures "to make the business viable", with the possibility of decreasing his workforce and opening hours.

"I'm running multiple venues across the city. The impact of this is enormous," he said.

"There needs to be some sort of financial support for businesses and it needs to happen very quickly."

Rajan Trichy Subba Raman has been running The Wee Shop in Bangor, County Down, for the past six years and is now considering closing the business for good due to rising costs.

Mr Raman's latest electricity bill, covering May to August, totalled £837.13, up from the previous quarter's bill £230.47.

With the rise in energy prices, coincided with a return to pre-pandemic rates, Mr Raman said he has said to let three members of staff go.

"We reduced hours of operation and our stocks are all running very low, because of cashflow," he said.

"My lease for the shop is until next May. I don't know whether I would be able to renew if it goes on like this."

The Department for the Economy (DfE) said that, as more than half of Northern Ireland's electricity was generated from gas or coal, global markets had a huge impact on prices paid by consumers.

A spokesperson said it was working with government to secure further support measure to help all those impacted by energy costs and cost of living pressures.

Power NI said local energy costs were "determined by the international markets", citing the war in Ukraine and competition from Asian markets as contributing factors.

"These are international, geo-political issues that are totally beyond the control of any local supplier," a spokesperson said.

The energy provider said it "remains committed to helping those who are being impacted by the cumulative rise in the cost of living".