THE head of a Yorkshire wool dyer has warned that a 20 per cent rise in its electricity bill could cripple his business after facing an £18,000 increase next year.
Tim Brooksbank, director of Spectrum Dyers, which dyes wool for carpet manufacturers, said the increase would add pressure to the firm which is already being squeezed.
A number of energy companies have started to push up their prices, blaming rising wholesale costs, following concerns about the availability of supply during winter, coupled with announcements that nuclear power stations in France, where the UK imports power from, are to be taken offline for safety checks.
Rises in taxes, renewable energy subsidies and network/transmission costs, which account for half of electricity bills, are also expected over the next year.
Mr Brooksbank said: “We thought energy prices were getting lower but they have gone the other way.
“We’ve been holding off signing a new contract for next year in the hope the price will go down but it’s hovering at around 20 per cent.”
Spectrum, which has a £1.8m turnover, is a commissioned carpet yarn dyer and winder for manufacturers in Kidderminster and Lancashire.
Mr Brooksbank said the majority of its overheads come from its electricity bills. Most of its electricity is used to dry the dyed wool.
“We can’t pass any costs on so we have been absorbing any increases over the last two years ourselves but it comes off our bottom line,” he said.
He added: “We had quite a healthy business but over the last six months, and since the EU referendum, we have seen a downturn.
“Two customers have asked for price reductions today because their costs are being squeezed. Our costs are going up but our prices are being forced down. It’s getting harder and harder to make ends meet.”
Mr Brooksbank declined to say how many staff he employs. He added: “The last thing I want to do is to cut costs by cutting labour but at the end of the day I have to see what happens.”
MP Barry Sheerman warned the UK was in for a “hard winter” as people wake up to the full impact of Brexit.
“Prices are going up, inflation is rising and holidays abroad will become more expensive,” he said.
He added: “Industrialists are faced with extremely high tariffs for energy. There is a rising number of people telling me the falling pound is feeding through to their supply chain already. They knew it was coming but they have been swept away by how fast it has been.”
Mr Sheerman said the recent row between Tesco and Marmite maker Unilever, in which the latter raised prices across the UK to compensate for the sharp drop in sterling’s value, was the ‘tip of the iceberg’.
“The people who pay the price will not be people who are well off,” he said. “The bigger companies have been buying forward to provide a cushion for these price rises but smaller companies don’t have the capacity to forward purchase. These energy price increases will put some companies out of business.”
Bill Macbeth OBE, managing director of the Textile Centre for Excellence, added: “The industry needs to deal with a number of major issues and the problem is that most of the people who are tasked with leaving the EU voted to stay in.
“The value of the pound has a massive influence and we are paying the price with things like rising utility bills.”
A spokesman for E.ON, Spectrum’s current electricity provider, said it was committed to offering competitive products for its business customers and blamed the volatility of the energy market for the huge increase.
He added: “But we can go beyond just supplying energy to businesses and offer a range of solutions that can help companies to reduce their energy consumption or potentially generate their own sources of power which can cut costs and potentially provide a source of income.”