Firms may need mass bills bailout, warns BEIS committee chair

Amid worries about household bills, concerns about business’ energy costs have been neglected and may require their own mass bailout, the chair of the Parliament’s Business, Energy and Industrial Strategy (BEIS) select committee has warned.

In an interview with Utility Week, Darren Jones said: “It’s a really hard one and businesses haven’t had enough attention, including from my committee.

“If you end up in a world where consumers require furlough levels of bailouts then in theory you can see how there will be a case for a business bailout in the same way we did during pandemic.

“The government is clearly intending to do something with energy intensive industries but what about the coffee shops that are going to close unless there is some level of support? There’s been very little debate so far about what that looks like. I hope it’s one of their (the government’s) priorities.”

He said his committee will focus on business energy bills at its first sitting after the end of Parliament’s summer recess on 5 September when it will take evidence from firms on the economic pressures they face. Non-domestic customers do not benefit from the same protection that the cap has so far provided to households from rises in wholesale energy costs.

Jones, who is a Labour MP for Bristol, also defended the plan for tackling energy bills announced by his party leader Sir Keir Starmer on Monday.

While Labour’s £29 billion package has been criticised on the grounds that it would be too costly and is insufficiently well targeted, he said the energy crisis looks set to have an economic impact on people as great as the pandemic and so requires a commensurate response.

The key advantage of Labour’s proposals is they can be rolled out much more rapidly than by using other and more complicated mechanisms, such as the benefits system or council tax rebates, Jones said: “The benefit of the Labour approach is that it’s quick because essentially, you’re giving the money to the energy companies and the energy companies take it off the bills.

“It’s a quick way of doing it and of course by doing it in the universal way, which he (Starmer) has proposed, you will cover the people that often get left out by targeting. There are always some groups of people who deserve help, who don’t get it because they’re not on pension credit or Universal Credit or whatever it might be.”

In addition, he said concerns about poor targeting were lessened by the sheer number of households who will have problems paying their energy bills, pointing to new University of York research that shows around two thirds falling into fuel poverty when January’s forecast price cap increase comes into effect.

“You might be helping more people than need it but actually it’s affecting most people.”

Jones also said that boosting energy efficiency must be an important part of any response to the bills crisis.

“With energy efficiency work, it’s obvious we should be getting on with this and we need to get on with it sooner rather than later.”

Jones’ fellow Bristol Labour MP Thangam Debbonaire, who is shadow Leader of the House, has urged Boris Johnson to recall Parliament early from summer recess in order to freeze energy bills before next Friday announcement of the new energy price cap.

In separate letters sent to the prime minister and Tory leadership contenders Rishi Sunak and Liz Truss, Debbonaire has called for parliament to be brought back on Monday to pass legislation to freeze the price cap at its current level.