Businesses Face Delay In Receiving Government Help To Pay Their Energy Bills, No.10 Admits

Government warned "urgent clarity" needed as firms facing having to close
Some businesses may be forced to close this winter because of soaring energy costs.
Some businesses may be forced to close this winter because of soaring energy costs.
Kinga Krzeminska via Getty Images

Businesses could have to wait longer than households to get help from the government to pay their energy bills, Downing Street has confirmed.

Liz Truss has announced plans to freeze household energy bills from October 1.

Under the plan, bills for the average home will not increase past £2,500 for two years, saving typical households around £1,000.

The government has said an “equivalent” scheme will be put in place for businesses - but has so far failed to provide any details of how it would work.

The prime minister’s official spokesperson said on Wednesday there could be a “delay” for help for businesses.

“We will confirm further details of the business support scheme next week,” he said.

“If there is a delay we will backdate it to cover October energy bills.”

It came after the the Financial Times first reported that companies could have to wait much longer than households to get help.

“It is not worked through yet,” a government official told the FT. “I don’t know whether it will come in before November. There’s some debate about whether it can be brought forward and happen before then.”

Unlike with the support package for households, the government is having to create a whole new system to help businesses.

Businesses did not benefit from the Ofgem price cap and many are facing skyrocketing bills.

Kate Nicholls, the chief executive UKHospitality, the trade body that represents the industry, said: “Any delay in the delivery of energy support could be a final, fatal blow for hundreds of hospitality businesses teetering on the brink of ruin. Many simply won’t survive if they have to wait until November for help.

“Not only that, but energy price freezes won’t be enough on their own to save those businesses and the thousands of jobs they provide.

“Which is why we’re calling for a five-point plan of action through to April 2023, with a review in early 2023, featuring: 10% headline VAT rate for hospitality; a business rates holiday for all hospitality premises, with no caps applied; deferral of all environmental levies; reinstatement of a generous HMRC Time to Pay scheme; and the reintroduction of a trade credit insurance scheme for energy.

“It will help us guarantee jobs and wages, to ensure that businesses stay afloat, and to preserve and grow our communities across the UK. To achieve this however, the new Government needs to act quickly to address the soaring energy costs that are strangling the sector.”

Emma McClarkin, the chief executive of the British Beer & Pub Association, said: “Pubs and brewers will not be able to wait days, let alone months to get clarity on their energy bills.

“Many are making decisions now as to whether they will have to close their doors this winter. We need urgent clarity from government now.”

Truss told the Commons last week that businesses would be offered help “equivalent” to that given to households, but only for six months.

“After those six months, we will provide further support for vulnerable sectors, such as hospitality, including our local pubs,” the prime minister said.

The Federation of Small Businesses (FSB) has warned millions of firms have been “pushed to the brink by crippling energy bills”.

Martin McTague, the chairman of the FSB, warned whatever package was announced there must not be a “cliff-edge” after six months.

“Our work on vulnerability of small businesses to energy costs has revealed huge bills causing damage in virtually any sector that uses energy in any meaningful way, just like most households.

“Any future definition of ‘vulnerable industries’ will need to be broad, realistic and fair.”


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