Energy firms are warning the government that it has only days to finalise details of how a package will benefit businesses this winter.
Liz Truss has announced that like households, the state will pay energy suppliers the difference between the new cap and what energy companies would charge. But this is to only last six months. After this period the government scheme will change to a more focused package to assist for vulnerable industries.
National Chair of the Federation of Small Businesses (FSB) Martin McTague said:
“It’s a huge relief for millions of small businesses to hear confirmation they will be part of the Government’s plans to help on energy. Many have been pushed to the brink by crippling energy bills, and so it is welcome that help is on the way.
The toxic combination of uncapped energy hikes, high taxes, inflation and negative growth have become an existential threat for many.
However, the announcement is very high-level and sparse on detail so we will be working with the new Government to clarify what happens next. Small businesses’ instant reaction is that this is not enough information, yet, for them to plan.”
Questions that still remain to be unanswered include:
- What will be the fixed unit prices (and standing charges) from October 1?
- What practically will now change – will energy retailers suspend high quotes and contract offers and recalculate from October 1?
- Will those who have accepted hugely increased bills in recent weeks be able to renegotiate to bring their bills down to reasonable levels?
- As a small business normally gets quoted for at least 12 months, does that new quote include 6 months at a low rate and 6 months at a high uncapped rate? How does the energy retailer know who to quote extra support to, for the second six-month period?
“This must not result in a cliff-edge after six months, with the withdrawal of support to all but ‘vulnerable’ targeted industries, sectors or types of business. The definition of who falls in and out of that support will need to be looked at carefully at the three-month review.” Martin McTague added.