Businesses are calling for sanctions on Russia and urgent government assistance to prevent the Ukraine crisis from escalating as they warn of significant inflation risks and a shrinking climate for investment.
The CBI, which represents 190,000 businesses that employ 7 million people, will today urge ministers to recognize an “advanced crisis” in domestic and business energy bills and to quickly track major policy issues related to energy, supply chain and cyber security. To invest in companies.
CBI Director General Tony Danker said it was clear that the UK and other Western economies “now have to face the economic consequences of moving away from Russia”.
“These include significant expenditures flowing from energy independence, energy and other commodity spending, inflation, expected cybersecurity attacks, and climate reduction for investment.”
The lobby group said businesses “fully support the ban despite their costs”. BP, Shell, PWC and KPMG are among the businesses that have said they will leave Russia.
British manufacturers, including Jaguar Land Rover and Diageo, the Smirnoff vodka maker, have stopped exporting to Russia. The impact of sanctions on Russia has led to record electricity prices, which have created a risk of a recession in Britain in the second half of the year. There are also fears of a Russian invasion of the food market.
The CBI is urging ministers to take swift action to make Britain more resilient to economic threats and to support businesses at risk of rising costs. It seeks to accelerate towards a clean energy solution by recognizing the role of domestic oil and gas, as well as investing in wind energy and nuclear, carbon capture and hydrogen growth.
Danker warned that the government would have to think “urgently” about consumers because of the higher bills by the end of the year, and said that we must “immediately move toward energy efficiency in households to reduce demand”.
Energy-intensive industries that are under threat due to rising prices will also need support, he said.
The Federation of Small Business says energy bill aid is going to be “critical” for small businesses. It is calling for discounts on business rates to offset high energy costs. As the supply of goods is threatened by the ban, the CBI said the government needs to identify new business partners and devise a strategy to protect them.
Cybersecurity needs to be developed and embedded in society and business, says Danker.
To avert a recession in UK business investment, the CBI is appealing to the government to help create a clean energy market and new trade relations.
Denker said the new investment tax cut would also be a way to “signal that the UK economy could benefit from the tailwinds and could not be withdrawn by Russia’s actions”.
An official spokesman said: “Our new sanctions, including a pledge to phase out Russian oil imports this year, send a clear message to Russia that nothing and no one is off the table. At the same time, the UK is committed to creating cleaner, cheaper energy to reduce our exposure to the volatile global gas market. “