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Decision on energy bill support for businesses postponed

Updated: May 2, 2023



The Treasury has stated that a decision regarding additional assistance for companies dealing with skyrocketing energy costs won't be made until the new year.


Currently, wholesale gas and electricity prices are set for businesses from October through March 2023; however, the assistance is being reviewed due to the expense.


Business groups were angered by the delay because ministers had previously committed to make a statement before the end of 2022.


They claimed it was making businesses apprehensive about their costs.


"Disappointing news that government has also postponed announcement on future energy support until the New Year rather than before Christmas as previously announced," tweeted Kate Nicholls, boss of UK Hospitality, which represents hotels, restaurants and others in the industry.


"Businesses are facing daily changing rates and contract decisions in Jan so certainty was really needed."


Businesses are not normally protected by an energy price cap, which restricts the amount suppliers can charge per unit of energy, unlike households.


But once energy prices rose this year, the government's Energy Bill Relief Scheme fixed expenses, giving many businesses a lifeline that otherwise could have faced bankruptcy.


Due to the scheme's enormous cost to taxpayers, the government announced in October that it would examine it. By the end of the year, it would publish its conclusions. The possibility of limiting help to "vulnerable firms" is being discussed by officials.


On Monday, the Treasury said its final decision would now not be announced until the start of 2023.


"We are protecting businesses from high energy costs this winter, caused by Putin's invasion of Ukraine, through the six-month £18bn Energy Bill Relief Scheme," a spokesperson said.


"However, this is very expensive, and we need to ensure longer-term affordability and value for money for the taxpayer.


"That is why we are currently carrying out a review with the aim of reducing the public finances' exposure to volatile international energy prices from April 2023. We will announce the outcome of this review in the New Year to ensure businesses have sufficient certainty about future support before the current scheme ends in March 2023."


Business organisations have urged the government to give companies assurances about energy support.


The British Chambers of Commerce (BCC) pushed the government to reveal something before Christmas on Monday, claiming that many of its businesses will find it difficult to pay their energy bills when the programme ends.


"Just over a month ago, the chancellor promised businesses that they would receive a plan on the future of the energy support package before the end of the year. With 24 hours left until parliament rises, businesses have one simple question: 'Where is this plan?'" said Shevaun Haviland, its director general.


"Businesses now face an anxious and uncertain festive period, unable to plan for the New Year. "



 

Are you affected by the rising costs in energy? Get in touch with us to see how we may be able to help


0151 459 3388 | info@smart-energy.uk




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