Businesses hit back at new government energy bill support package

While some welcomed the new scheme, other business groups feel disappointed at the reduced level of support

Big Zero Report 2022

The Prime Minister and the Chancellor have given a new energy bill support package for businesses the final sign-off.

The new subsidies will cost around £5.5 billion and will last for one year, the government confirmed.

The Treasury argued the reduction is in part a result of recent falls in wholesale gas and electricity prices.

The Chancellor had previously explained that the current subsidies are “not sustainable”.

Business reaction to the government changes has been mixed.

The Federation of Small Businesses (FSB) called ministers “out of touch”.

Martin McTague, National Chair of the FSB said: “Today’s decision to all but eliminate help through the Energy Bill Relief Scheme is a huge disappointment for small businesses.

“For those struggling, the discount through the new version of the scheme is not material. Many small firms will not be able to survive on the pennies provided through the new version of the scheme.

“This is so out of touch. Two pence off a kWh of electricity and half a pence off gas is totally insignificant for small businesses, despite costing billions to the taxpayer. The government will inevitably have to come back.”

Responding to the extension of support on business energy bills, Tom Thackray, CBI Director for Decarbonisation Policy, said: “It’s unrealistic to think the scheme could stay affordable in its current form, but some firms will undoubtedly still find the going hard.

“The government has done much to protect businesses through the energy crisis. It must remain open, flexible and pragmatic in its approach to volatile wholesale energy markets as the year unfolds.

“Heavy energy users and those exposed to global trade are among some of the most impacted in the current crisis, so the additional support for these firms is a particularly welcome step.”

The Institute for Family Business has said “business investment plans are now in jeopardy”.

Fiona Graham, Director of External Affairs and Policy at the Institute for Family Business said: “This change comes at a very difficult time for the UK’s 4.8 million family-run businesses who are facing a recession, reduced consumer spending, and increased costs from high inflation.

“With the new scheme applying a discount to wholesale prices, we hope to see bills stabilise as direct result of the recent fall in energy prices, driven by warmer weather this winter. In the short term, however, the government must do all it can to ensure that energy companies pass on these reductions to customers.”

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