Energy price cap for businesses will be announced in days

Businesses will be told next week how their energy bills will be discounted, the Government has confirmed following fears firms could face devastating extra costs this autumn.

Corporate leaders have warned that many businesses may fold entirely if they are not given urgent clarity about their bills.

Last week, Liz Truss promised that businesses would be given support for their energy bills equivalent to that provided for households, which are having costs frozen a little above their current levels for two years.

But no details have been made public even as some firms report being asked to pay bills which are as much as 10 times higher than they used to be.

Following reports that support may not be available until November, the Government has moved to speed up the announcement of how the package will work.

A Downing Street spokesman said: “We will confirm further details of the business support scheme next week. The scheme will support businesses with their October energy bills and that includes through backdating if necessary.

“It may come in parallel with the household support scheme. If there is a delay of weeks we will backdate it to cover October energy bills so that businesses don’t miss out… We’re speaking to energy companies and businesses and representative organisations to provide them with reassurance.”

Next week’s announcement, likely to take place some time between Wednesday and Friday, will be separate from the planned fiscal statement by Chancellor Kwasi Kwarteng and is set to be led by Jacob Rees-Mogg, the new Business Secretary.

Businesses do not benefit from the existing price cap applied to households and have therefore seen gradually rising prices over the last few months, whereas individuals and families have had their bills stay at the same level since April.

Rising energy costs for companies have helped drive up general inflation, currently running at 9.9 per cent, and business groups have warned that inflation will remain high as firms continue to pass on their increased costs to their customers.

Karen Betts of the Food and Drink Foundation said: “The support the Prime Minister announced to help households and businesses deal with soaring energy bills is very welcome. However, our sector urgently needs a more detailed conversation with the UK Government on the scope of the business energy support scheme.

“The resilience of the food and drink supply chain has been eroded by successive crises, and real fragilities are now being exposed by soaring inflation.”

Alex Veitch of the British Chambers of Commerce added: “There is a limit to how long any firm can sustain these rising costs before something has to give. We know from our research that two thirds of businesses plan to increase their own prices.

“The size of last week’s Government intervention on energy prices should have a dampening effect on inflation when it is enacted. But the lack of detail on exactly how much help any individual business will get, and for how long, means very few will be planning to invest any time soon.”

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