Swindon & Wiltshire News
Keeping the lights on – Government unveils £150 billion energy plan, but limits business support to six months
Prime minister Liz Truss has announced a £150 billion package to help Britons with soaring energy prices – but has promised just six months cover for businesses compared to two years for domestic energy customers.
The Energy Price Guarantee will limit average annual household bills to £2,500 over the next two years.
It will apply to the unit cost of energy so the amount any household pays will vary depending on how much gas and electricity they use.
Businesses and the public sector were promised “equivalent support” but only for six months. After that, the prime minister said support would be focussed on “vulnerable industries”.
Reacting to the news, Matt Griffith, director of policy at Business West, said: “Business West warmly welcomes protection for households in our region from 1 October and is relieved that equivalent protection has been promised for business customers for this coming winter.
“We await detail about how this will work in practice for firms in our region and what happens to bills beyond the initial 6-month period if prices remain high. Businesses need long term market regulation to provide certainty and stability to support their otherwise viable operations.
“We want to encourage members and concerned businesses to get in touch with us. This will ensure we represent and speak for businesses like yours in our work directly (and through the British Chambers of Commerce network) with key decision makers, such as Ministers, MPs, and the Bank of England.
“Our current Quarterly Economic Survey is asking businesses to tell us what the new Prime Minister can do to support them during this crisis.”
Shevaun Haviland, Director General of the British Chambers of Commerce, said: “The BCC welcomes this quick and positive intervention from Government. It is clear the new Prime Minister has listened to firms and is providing a strong package of support for business, equivalent to the crucial support to consumers.
“We welcome the breadth of the offer to all non-domestic energy users with businesses, charities and public sector organisations all to be included.
“The price cap is a measure the BCC has previously called for. It will give businesses some financial certainty on the outlook for the next six months. It is crucial that there is a review at three months so there is time to plan for the end of the six-month period.
“However, given the other challenges still facing business on labour shortages, supply chain disruption, and rising raw material costs, it is unlikely that we will see greater investment from business in the short term.
“If we are to truly revitalise our economy for the difficult months ahead then there must be a clear long-term plan that gives business the confidence to grow.”
The national chairman of the Federation of Small Businesses, Martin McTague said: “It’s a huge relief for millions of small businesses to hear confirmation they will be part of the Government’s plans to help on energy. Many have been pushed to the brink by crippling energy bills, and so it is welcome that help is on the way.
“The toxic combination of uncapped energy hikes, high taxes, inflation and negative growth have become an existential threat for many.
“FSB is proud to have played our part in championing small businesses’ plight and pitching in ideas to the new team in power, and so we have contributed to today’s intervention.
“Constricting the scale of energy bills for small businesses is unprecedented; we now have a high-level commitment in principle to help businesses get through the winter intact. Done right, this will be a lifeline – protecting jobs, communities and future economic recovery.
“However, the announcement is very high-level and sparse on detail so we will be working with the new Government to clarify what happens next. Small businesses’ instant reaction is that this is not enough information, yet, for them to plan.”
Rain Newtown-Smith, chief economist at the CBI, said: “Government is backing UK business by helping all firms across the economy. Skyrocketing energy prices could have made many well-run businesses unviable this winter and these measures will help ensure that fewer fail.
“The devil will now be in the detail to come. Government, businesses and energy suppliers must work together to ensure the support pledged gets to firms quickly.
“This energy crisis is not impacting all firms equally, so it’s encouraging that more targeted measures are to be introduced for businesses in sectors that are most at risk.
“Despite these tough times, business remains in no doubt that doubling down on net zero is the route out of this crisis, the way we grow our economy and the way we make ourselves more energy resilient for the future.”
Emma McClarkin, chief executive of the British Beer and Pub Association, which had warned thousands of pubs could go out of business, said: “By committing to an energy price cap for businesses today the PM has shown she understands just how critical the energy crisis has become for our breweries and pubs, and just how important pubs and brewers are to their communities.
“Whilst we still need detail on the level of the cap, this intervention will hopefully help thousands of business owners to breathe a little easier over energy bills in the coming winter months.
“This announcement will avert the immediate threat of the energy crisis for businesses, but we need clarity and assurance for the long-term so our brewers and pubs can plan effectively and thrive at their heart of their communities long into the future.
“The cost of doing business is still a very real threat for many but we are encouraged by the direction this Government is going in. Now we need to hear more on business rates, VAT and keeping beer duty low.”
