‘WITHOUT CHEAPER GAS BIG FIRMS WILL SHUT’
MANUFACTURERS could be wiped out unless we produce low-cost gas from fracking, warns an industry chief.
Chemicals giant INEOS – founded by super-rich Sir Jim Ratcliffe – is facing cliff-edge high power bills.
One of its directors, Tom Crotty, said: “If we continue where we are, you will have swathes of industry shutting down.
“We’re losing money hand over fist on our chemical business. How long do you carry on doing that?”
PM Liz Truss has lifted a ban on fracking and INEOS is offering to drill a test site to show it is safe.
Critics say it will not lower the cost of gas but Mr Crotty points to the US where prices “have been between two and seven times lower than in the UK”.
He criticised planning red tape and added: “If push comes to shove we could find ourselves running out of gas. We’re standing on the stuff, why don’t we use it?”
rants, apartments and offices.The investment zones will also have “liberalised” planning rules that would allow more land to be used for housing and commercial development.
Mr Kwarteng also confirmed last night that the 1.25 per cent National Insurance rise introduced by ex-Chancellor Rishi Sunak to cover strains in health and social care is being reversed from November 6.
Legislation allowing the change to be made was tabled in the Commons yesterday.
The Chancellor said: “Taxing our way to prosperity has never worked. To raise living standards for all, we need to be unapologetic about growing our economy.
“Cutting tax is crucial to this – and whether businesses reinvest freed-up cash into new machinery, lower prices on shop floors or increased staff wages, the reversal of the levy will help them grow whilst also allowing the British public to keep more of what they earn.”
The Treasury said most employees will receive a cut to their NI contribution directly via their employer’s payroll in their November wages, although some changes may be delayed to December or January. The NI increase was expected to raise about £13billion a year to help tackle NHS backlogs and pressures in social care but the Government says funds will be maintained.
Mr Kwarteng says that growing the economy will increase the tax revenues needed to pay for public services.
Economic researchers at the Institute for Fiscal Studies (IFS) said the plan to drive growth was “a gamble at best” and ministers risked putting public finances on an “unsustainable path”.
Paul Johnson, IFS director, said the Chancellor was ripping up his predecessor’s tax increases with an intervention on a scale not seen in 34 years, since Margaret Thatcher was PM: “This will actually, we think, be the biggest tax-cutting fiscal event since Nigel Lawson’s budget of 1988.”
Business leaders welcomed the move, saying it was a “big win” for struggling firms. Shevaun Haviland, director general of the British Chambers of Commerce, said: “After months of campaigning, the Government announcement to reverse the increase to the National Insurance Contribution (NIC) is a big win for the British Chambers of Commerce and the business community. This is muchneeded support for businesses during these difficult times.”
Kate Nicholls, chief executive of trade body UKHospitality, said: “Hot on the heels of government support for businesses facing rising energy costs, cutting employer NI contributions is more excellent news for the hospitality sector, and will help businesses reduce costs as they attempt to return to profitability while facing a perfect storm of financial pressures, including the interest rate rise, VAT back to 20 per cent and the unfair business rates regime.
“Cutting employee NICs is a great way to ensure people keep more of their money, primarily so that they’re able to pay their bills and then to enjoy affordable luxuries, such as visiting hospitality venues.
“This announcement is particularly welcome, as UKHospitality has long campaigned for an employer NICs regime that supports job creation, which this move will certainly help towards.”
Kitty Ussher, chief economist at business leaders’ body the Institute of Directors, said: “Businesses right across the country will be applauding the Government’s realisation that raising employers’ National Insurance was a mistake.
“As the Institute of Directors has consistently and repeatedly argued from the outset, this was quite simply a tax on jobs, which businesses had to pay regardless of whether they are profitable.”