A £10 billion bailout should be used to keep afloat small businesses struggling with soaring energy costs, the Liberal Democrats have said. High streets risk turning into “ghost towns” unless small firms are handed a lifeline, ministers have been warned.
Emergency legislation for a Covid-style support scheme should be introduced as soon as MPs return to Westminster on Monday, Lib Dem leader Sir Ed Davey said. The scheme would offer grants of up to £50,000 to shops, pubs, restaurants and all small businesses to help them cope with uncapped rises in bills, with the party suggesting the measures could be funded through increased taxes on banks.
Sir Ed said: “Our treasured high streets risk being turned into ghost towns and small businesses across the country risk being devastated by sky-rocketing energy bills, but Conservative ministers don’t seem to get it or care. Local shops, pubs and restaurants could all close their doors for the last time over the coming months unless the Government steps up urgently. We need an energy bailout now to save the high street, rescue small businesses and keep prices down for families.”
Former energy secretary Sir Ed said: “This could be funded by reversing the Conservatives’ tax cuts for the big banks, and focusing on saving our struggling small businesses instead. There is no time to waste. The new Conservative prime minister must bring in legislation to protect families and businesses from soaring energy bills as soon as Parliament returns on Monday.”
The new Tory leader will be elected on Monday. Either Liz Truss or Rishi Sunak is expected to become prime minister on Tuesday.
Under the Lib Dem proposals, small and medium-sized businesses would be offered government grants covering 80% of the increase in their energy bills for one year, up to a maximum of £50,000. The estimated £10 billion cost of the scheme could be met by scrapping the cut to the bank surcharge that is due to take effect in April 2023 and increasing the bank levy to 2015 levels, raising £10.6 billion over the next four years.
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