Business groups have welcomed today's Government announcement of support for businesses hit by soaring energy costs - but say more swift action is needed to help key sectors such as hospitality.
The Government today announced it would cap energy bills for non-domestic properties from October 1 as part of a package of support aimed at averting the potential collapse of thousands of businesses.
Emma McClarkin, chief executive of the British Beer and Pub Association, said the energy support “will be a lifeline for many pubs and brewers this winter”.
But she added: “Whilst this announcement has helped businesses to breathe an initial sigh of relief as they head into this critical period, more support is needed to tackle the cost of doing business and we need a plan beyond the next six months.
“Our industry is one of only a few that supports jobs and livelihoods in every single part of the UK, and we have the potential to deliver growth in every single community we serve.
“On Friday, the Chancellor must take steps to address the cost of doing business, by reducing the tax burden on our sector, allowing pubs and brewers the chance to not only survive this winter, but remain at the heart of local economies and their communities for many years to come.”
Shevaun Haviland, Director General of the British Chambers of Commerce, said: “For months we have been calling for Government intervention to help businesses with eye watering energy costs. This support package is significant and will ease the cost pressures that have been piling up on businesses.
“It will allow many firms that were facing closure, or having to lay off staff or reduce output, to keep going through the winter.
“But the exact level of support will vary greatly from business to business depending on the detail of its contract, so some will inevitably do better than others.
“We now need action to get this saving passed onto business as soon as possible – every day will put some firms closer to the edge and they cannot hang on much longer."
Ms Haviland said the scheme needed strong oversight to ensure eligible firms do not miss out. And she said that in Friday's mini-Budget, Chancellor Kwasi Kwarteng needed to offer more long-term support to business.
She said: "For those that will benefit, six months support is not enough for most firms to make plans for the future.
“We understand there are a range of unknowns for the Government in looking ahead, but without that reassurance very few firms will make plans to invest or grow.
“Some businesses will still struggle to meet their bills despite this government intervention, the Chancellor must prioritise those firms in his mini-budget on Friday.
"There are a range of other challenges that must be addressed including labour shortages, supply chain disruption, and rising raw material costs.
“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.”
Kate Nicholls, chief executive of UKHospitality, said: “This intervention is unprecedented and extremely appreciated as we head into an uncertain winter with numerous challenges on many fronts.
“The inclusiveness of the supports announced today – covering businesses small and large – will be extremely beneficial to the sector. A sector that provides a huge number of jobs, many of which are now more secure.
“The Government – and the Prime Minister herself, in her comments in New York yesterday – has singled out the vulnerability that energy costs are inflicting on the hospitality sector.
“Today’s announcement will give businesses some confidence to plan for immediate survival but we will not relent in our pursuit of a more comprehensive package to safeguard businesses and jobs.
“The levers of reduced VAT and business rates reliefs are still available to the Government, and there must also be a comprehensive package to ensure that there is no cliff edge when these measures fall away.”
Mark Davyd, CEO & founder at the Music Venue Trust, welcomed the measures - but reminded the Giovernment that music venues would also need ongoing support.
He said: "We await full details of the scheme and the method of implementation by the energy retailers and suppliers, but the base unit rate of 21.1p per kW/h laid out by these plans is sufficient to avert the collapse of the sector if it is fully delivered."
He added: "The Government has indicated that 'pubs' will attract support for longer than the 6 month initial period based on the special circumstances of the energy crisis in relation to the operation of their business. We have asked for urgent clarification that the broad term 'pub' includes music venues and other licensed premises essential to the grassroots music ecosystem, and anticipate that this will be the case.
"It should, however, be noted that suppliers to this sector face extraordinary financial pressures resulting from the cost of living crisis and the Covid period. We have presented to the Government the case for action on VAT and Business Rates and await the statement by the Chancellor on Friday to see what further action will be taken to stabilise the sector and return it to growth.
"Music Venue Trust has requested that the Government work with us on long term plans to secure affordable, sustainable and resilient energy for the sector. There is a big opportunity presented by this crisis to support a radical intervention into energy supply and demand and we strongly urge the government to use the period of protected energy prices to bring forward plans to permanently tackle the causes of the energy crisis."
Melanie Leech, chief executive at the British Property Federation, said: "The Government has delivered on its promise to act quickly to provide support to businesses across the UK facing crippling energy price rises.
"However, vulnerable sectors will need further targeted support and the Business Secretary must continue look at all options, including measures to reduce the unsustainable burden of business rates.
"Now is the time to freeze the business rates multiplier for the next financial year to avoid significant inflationary uplifts and make sure that businesses whose rates are being reduced because of the last revaluation get the benefit of this reduction straight away.”
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