One of the country’s biggest business bodies has urged the new PM to provide even more help for companies struggling with the “cost-of-doing-business” following latest support with energy bills.
Liz Truss has told Parliament average household energy bills will be frozen at no more than £2,500 for the next two years, and said businesses and non-domestic users such as schools and hospitals – not covered by the existing price cap – will get an initial six-months of support. Following that there will support for the most vulnerable industries, with a review in three months’ time.
In exchange the Government will provide energy suppliers with the difference between the new, lower price and what they would charge were this not in place.
The Government will borrow from global markets to fund the deal which is expected to dwarf the furlough scheme, making it the most costly programme in peacetime, which according to some reports could hit £150 billion.
Scott Knowles is chief executive of East Midlands Chamber, which has more than 4,000 members. He said it was reassuring for firms to know there would be some support with “eye-watering” energy prices.
He said: “Confidence has been plummeting in recent months as firms are hit from all sides, with many SMEs lowering their sights to just get through a long, hard winter before they can begin to think about a longer-term future.
“As ever, the devil will be in the detail and while households now know what the price cap will be over the next two years, businesses largely remain in the dark when it comes to financial forecasting beyond the next six months.
“Firms need certainty and, if we are to prevent businesses that would be viable in normal times from being squeezed out of existence, we need a longer period of intervention commensurate with that for households.
“Immediate support for businesses is the number one priority today but we must not take our eye off the ball in the race to net zero.
“Over the past two-and-a-half years, businesses in our region – which is traditionally represented strongly by energy-intensive industries – have responded to enormous challenges by improving their efficiency and investing in technology that reduces energy usage.
“Research we conducted in partnership with the University of Derby also demonstrated how the proportion of East Midlands organisations integrating green growth into their business strategies has more than doubled over the past four years, from 9.7 per cent in 2018 to 21.5 per cent in 2022.
“So what we also need is a long-term plan to support firms to continue this journey by investing in growth that is sustainable for both their business and the environment, which ultimately helps with national energy security.
“While energy prices top the list of cost pressures facing businesses, our ongoing Quarterly Economic Survey for Q3 2022 shows there remain huge concerns over staffing, raw materials and fuel.
“Government must also address these issues by reviewing and reforming the shortage occupations list to include more jobs at all skill levels, backing businesses to invest in training current and new staff, and removing barriers to international trade.
“It’s important we get this right so companies can get back to doing what they do best – creating jobs, wealth and opportunities, and helping the economy get out of the difficulties it’s currently in.”
Some unions, meanwhile, have criticised the energy announcement with TUC general secretary Frances O’Grady saying: “The Prime Minister is making the wrong people pay.
“She should have imposed a much larger windfall tax on profiteering oil and gas giants, and she should have required all firms getting help with energy bills to commit to no lay-offs for the lifetime of the help, to protect livelihoods.
“It’s not just energy bills soaring – so she needs to do more to help families get through the winter. That means a real plan to get wages rising, a big boost to universal credit, child benefit and pensions, and a massive rollout of home improvements to cut bills.
“It’s time to bring energy retail into public ownership to make sure this crisis never happens again.”
The GMB said time was running out to fix the “Tory mess” it warned had left the UK so “underprepared and exposed”.
National officer Andy Prendergast said: “It is a stain on this Government that our nation’s energy supplies are in such a vulnerable state.
“The Tories have been in office for 12 years. Their failures to build new nuclear power stations, to protect and utilise our gas storage capacity and willingness to engage in political groupthink on domestic on and offshore resources, means we are playing catch-up in the race to defend ourselves against the global energy crisis.”
“GMB calls on ministers to move at speed, because the brutal truth is the UK’s energy infrastructure will become even more vulnerable during the next decade, as existing nuclear plants are taken offline.”
