Yahoo Finance Businesses await details of support to cope with soaring energy bills
Businesses must be given certainty about support to tackle soaring energy bills, Jacob Rees-Mogg has been told, as he puts the finishing touches to his package to help struggling firms.
The Business Secretary is expected to announce on Wednesday how firms, schools, hospitals, charities and other non-domestic consumers will be spared some of the pain of rising gas and electricity bills.
The Government has already announced that bills for an average household in England, Scotland and Wales will be capped at £2,500 from October 1, but while businesses have been promised equivalent support they have been waiting for details as officials have been drawing up a bespoke scheme.
Today, I am announcing urgent action to reform the United Kingdom's broken energy market.https://t.co/qqqKFE3Smj pic.twitter.com/k3MYGQxLza
— Jacob Rees-Mogg (@Jacob_Rees_Mogg) September 8, 2022
As businesses have not benefited from the existing energy price cap and are not always able to fix their energy price through fixed deals, many are reporting projected increases in energy costs of more than 500%.
The Government plans a six-month scheme for all non-domestic energy users, but this will then be replaced with a targeted system focused on the most vulnerable industries.
Prime Minister Liz Truss suggested pubs could be covered by the longer-term support.
She told ITV News in New York: “The Business Secretary is conducting a review of exactly which businesses will be included – that review will be completed within three months.
“I can reassure people who own pubs that they are exactly the type of businesses that will get that longer-term support.”
We’re providing support with #EnergyBills for businesses, charities and public sector organisations.
Those on variable contracts, whose fixed contract is coming to an end or who have agreed a new contract recently will be eligible.
👉 https://t.co/CqB8otkPyf pic.twitter.com/6cVdAIuNtX— Dept for BEIS (@beisgovuk) September 8, 2022
Tina McKenzie, policy chair of the Federation of Small Businesses (FSB), said: “Our latest research shows near two-thirds of small firms are paying more for energy this year compared to last year, with two in five seeing double, triple or even higher increases in their bills.
“We hope the energy price guarantee means an equivalent amount of support per unit of energy, to the support which households are receiving.
“It should give businesses some degree of certainty over their energy prices for six months, so they can plan confidently for the winter.
“At the moment they cannot plan, and they are awaiting the announcement tomorrow to be the moment when they can.”
The complexity of setting up a new scheme has led to concerns support for firms may not be in place by October 1, and the FSB said help should be backdated if the system is not up and running by then.
“Many small firms have October 1 as their start date for new contracts, so we’d like to see the price guarantee comes into effect then for those who sign new contracts from then, but also those who have been locked into contracts since prices in quotes rose astronomically in recent months,” Ms McKenzie said.
“There should also be a backdating commitment now, especially if it’s not rolled out until November.”
She also raised concerns about the prospect of a “cliff edge” in six months for businesses which may not qualify for ongoing support.
“There are no such things as ‘vulnerable sectors’ and ‘non-vulnerable sectors’ when it comes to these energy hikes, so we will be encouraging Government to take a broader approach to this so that all those that continue to be deeply affected are covered.”
