Businesses may face weeks of delay over energy bills support, No 10 says

  • 9/14/2022
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Businesses may face a delay of several weeks in accessing the financial support promised to them by Liz Truss to help ease the burden of spiralling energy bills this winter, Downing Street has admitted. Amid reports that the package for businesses would not be in place by 1 October, the prime minister’s spokesperson said there could be a “delay of weeks” but insisted companies would receive backdated payments. They said this was not due to the 10-day national mourning period after the Queen’s death, but because businesses did not have a price-cap system, unlike households, meaning that a “brand new” scheme was having to be constructed. The government has contacted energy firms and their representatives to urge them not to cut off the supplies of companies unable to pay their energy bills, if the support does take longer to arrive than hoped. “We will confirm further details for the business support scheme next week,” Truss’s spokesperson told journalists on Wednesday, after reports emerged in the Financial Times about a delay. They added that they recognised there was “concern about the support” but promised it would arrive before November. Pressed on whether the scheme would begin from 1 October, when the energy price cap for households will in effect freeze average annual bills at £2,500, the spokesperson said: “I don’t have a set date for you right now. It may come in parallel with the household support scheme. “If there is a delay … we will backdate it to cover October energy bills so that businesses don’t miss out.” Truss last week promised that a six-month scheme for businesses and public sector bodies such as schools and charities will offer “equivalent support” to that for households, with a review in three months about how it could be better targeted. But companies across many sectors of the economy have warned for weeks that they may not survive the winter as a result of soaring energy bills, with fixed-price tariffs coming to an end and quarterly rent bills looming for many at the end of the month. Pubs and brewers are among those raising the alarm that any delay in the government’s support package could force more businesses to close, triggering deep job losses. Emma McClarkin, the chief executive of industry body, the British Beer and Pub Association, said these businesses “will not be able to wait days, let alone months to get clarity on their energy bill”. “Many are making decisions now as to whether they will have to close this winter,” she said. “We need urgent clarity on whether this cap will deliver for businesses and help them out of a crisis that has been building for months, and urge the chancellor to seriously consider what immediate reassurance he can give for the thousands of business owners currently in despair.” Alhough it is likely the business support will require legislation in order to be enacted, the spokesperson said the government was “still working through exactly” whether or not that would be necessary. However, there has been no further clarity on whether the support payments will be the same, which would be a very small amount relatively for companies that have much higher bills, or higher to ensure a safety net remains for those firms at risk of going bust. “I’m not able at this point to set out the exact details of the scheme,” the spokesperson said when asked how the support would be equivalent. Ministers and officials are reportedly struggling to find a mechanism for setting a limit to businesses’ energy costs, with companies on complex contracts, which often hedge against future increases in prices. A “fiscal event” is expected to be held towards the end of next week laying out the full details of the energy support package, as well as Truss’s tax-cutting plans. However, the exact date has yet to be chosen, with the situation complicated by Truss attending the UN general assembly in New York for most of next week and parliament then due to go into conference recess. The government is looking at shortening the recess, both at the beginning and end, given concerns about inaction on the energy bills crisis, but it has promised not to encroach on the dates of either the Labour or Conservative party conferences.

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