Business organisation have welcomed the new Energy Bill Relief Scheme announced today by the government, which will support thousands of local shops and other non-domestic businesses for six months from October.
Through the new scheme, the Government will provide a discount on wholesale gas and electricity prices for all non-domestic customers - including all UK businesses, the voluntary sector like charities and the public sector such as schools and hospitals - whose current gas and electricity prices have been significantly inflated in light of global energy prices. This support will be equivalent to the Energy Price Guarantee put in place for households.
It will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts. It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial six-month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November.
“We strongly welcome the government’s support package which will provide a lifeline for the UK’s local shops, enabling them to keep trading and serving their communities,” James Lowman, chief executive of the Association of Convenience Stores, said.
“We will continue to work closely with the Department for Business, Energy and Industrial Strategy on longer term solutions to the energy crisis facing convenience stores and other businesses, including ways to incentivise investment in energy efficient technology.”
Andrew Goodacre, chief executive of the British Independent Retailers Association, said: "It will be a relief to all independent retailers on the high street as they can now focus on the very important final quarter of the year.
"Our focus also now turns to helping the government determine which businesses are vulnerable due the energy increases as we feel indie retailers fall into this category. BIRA has been very vocal in asking for the details of this support and independent retailers can look forward to lower than expected energy bills. We now want to turn our focus on determining the businesses classed as vulnerable as we know they will receive longer term support. Rather than individual businesses, we need to show that the high street is a collection of businesses that support each other to make the place successful. No high street wants to see lots of empty shops so we need to focus on the vulnerability of the ‘place’.”
Kate Nicholls, chief executive of UKHospitality, said: “This intervention is unprecedented and it is extremely welcome that government has listened to hospitality businesses facing an uncertain winter. We particularly welcome its inclusiveness – from the smallest companies to the largest - all of which combine to provide a huge number of jobs, which are now much more secure.
“The government has recognised the vulnerability of hospitality as a sector, and we will continue to work with the Government, to ensure that there is no cliff edge when these measures fall away.”
However, the Scottish Licensed Trade Association (SLTA), while welcoming the announcement, has warned that it “goes no way near enough and more needs to be done to help the struggling hospitality sector through the winter months.”
Commenting, SLTA managing director Colin Wilkinson said: “This is news that we have been waiting for and obviously we welcome it but when you look beyond the headlines it doesn’t live up to the hype as this new scheme caps the wholesale price and pubs and bars could still be paying 200-300 per cent higher bills than normal.
“There are pubs and bars currently on a rate of 90p per kWh, in comparison to 15p in normal times. The government says that the current wholesale price of gas is about 42p per unit therefore businesses should see a reduction of 21p in their unit price but this still means much higher bills than before the energy crisis.
“Nothing in the plan tackles the problems of large deposits and bonds, particularly for the SME independent sector, nor restricts the additional margins made by the energy suppliers.
“The SLTA is concerned this may not be the lifeline we were all hoping for and today’s announcement is not enough. More needs to be done to help the struggling hospitality sector through the winter months.”
Martin McTague, national chair of the Federation of Small Businesses, said: “Small businesses called for decisive action – now the government is delivering. With small firms the least able to avoid closure and 16 million employees relying on them, Ministers have listened to our community and got this big call right. Now it’s up to energy retailers to live up to the high bar set today and make sure this help reaches those on the ground.”
Jonathan Geldart, director general of the Institute of Directors, said: “This is an important intervention by the government and provides much needed short-term reassurance for the numerous firms that are facing soaring energy bills. We look forward to working with the government in the coming months to ensure that further relief is targeted at those industries and sectors whose survival is most threatened by current economic conditions.
“Ultimately, however, business and government will need to work hand in hand to develop domestic energy sources and reduce consumption and dependency on expensive fossil fuels.”
Anthony Impey, chief executive of Be the Business, said: “This package of support will give business owners the confidence to take long term investment decisions, which many have been postponing in response to rising prices.
“They can now focus their efforts on activities that drive growth and productivity, such as adoption of technology and increasing the skills of their employees and management teams.”
Karen Betts, chief executive of the Food and Drink Federation, said: “We welcome the scope of the Government’s Energy Bill Relief Scheme and the speed with which it’s being rolled out. It addresses the largest and most volatile cost pressure facing our industry right now. Although some aspects of the scheme are still to be clarified, it offers relief to food and drink manufacturers across the UK.”
Stephen Phipson, chief executive of Make UK, the manufacturers’ organisation, said: “Industry will warmly welcome the timely announcement of an energy price cap for an initial six months for all business users. Government has delivered a scheme which is simple to understand, giving reassurance to the business sector. However as appear prices will likely remain high for many months to come, industry will need support for a longer period to protect jobs and remain competitive, so the further announcement of a review on future support at the three-month stage is reassuring.
“We hope that this support can be made tangible as quickly as possible and not applied retrospectively at the end of the next quarter.”
