Yahoo Finance Rees-Mogg to unveil details of business support package
Business Secretary Jacob Rees-Mogg is to set out details of a major Government support package for businesses – running to tens of billions of pounds – to ease the pain of soaring energy bills through the winter.
The announcement comes amid heightened calls from firms for certainty over electricity and gas costs to enable them to plan ahead after a summer of political inaction due to the Tory leadership contest.
Ministers have said that firms, schools, hospitals, charities and other non-domestic consumers will be covered by the scheme following warnings of the devastating impact on the economy if they fail to act.
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.
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.
Kitty Ussher, the chief economist at the Institute of Directors, said businesses would welcome the Government intervention, but said it was essential they were given clarity as to how it would operate.
“It is essential to have the details because businesses obviously have to be able to plan for the future, not just the next few months but the next few years,” she told BBC2’s Newsnight.
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
“If they are unable to have the clarity there is hardly any point making the announcement in the first place.”
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.”
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.
She added: “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.”
Speaking in New York where she is attending the United Nations General Assembly, Liz Truss suggested pubs would be among those covered by the longer-term support.
The Prime Minister told ITV News: “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.”
