Support scheme delay leaves businesses in Xmas ‘limbo’

The government has been accused of leaving firms in “limbo” after failing to meet its own deadline for outlining the next phase of energy costs support for businesses.

The Treasury is conducting a review of the level of support non-domestic energy customers will receive beyond 31 March 2023 when its £18 billion Energy Bills Relief Scheme (EBRS) is due to expire.

During Treasury ministers question time on Tuesday (20 December), chancellor of the exchequer Jeremy Hunt told the House of Commons that the government will bring forward “an appropriate package” on energy support for businesses but that this will not be published “early in the new year”.

In his Autumn Statement last month, the chancellor of the exchequer said the review of the EBRS would be published by 31 December.

The EBRS, which was announced in September, provides six months of energy costs support for non-domestic customers in line with the parallel package limiting average household bills to £2,500 per annum.

The Financial Times and Sunday Times reported last weekend that Hunt was due to announce a package this week that would give a lower level of energy bills support to all companies when the EBRS ends at the beginning of April.

It was also reported that extra targeted support will be provided to energy-intensive businesses, like steelmakers, and other vulnerable sectors, such as hospitality.

Responding to the EBRS review delay, Federation of Small Businesses national chair Martin McTague said: “Four days before Christmas, there’s still no confirmation from the government on whether small firms will continue to be supported on soaring energy bills after the current EBRS ends on March 31 next year. Small firms have been asking for certainty on support before Christmas to deal with continued energy hikes, but they are now left in limbo until the new year.

“What’s supposed to be a festive period bringing back the small business spirit has now sadly been stolen by a Grinch government, who’s under the illusion that small firms can plan on a less than three-month horizon and survive this bleak winter without any indication whatsoever whether their energy relief will continue or not.”

“This is not the time to play around with vital support schemes that are giving businesses a fighting chance in the new year. All small firms want is the government’s continuing energy support – one that takes business size into account and applies directly to bills – after the current scheme ends.

“It can’t be stressed enough that small firms have typically lower margins and least able to deal with fresh interest rate hikes, rampant inflation and consumers cutting back. That’s why energy support can’t be a purely sector-based decision targeted at only a handful sectors, which will lead to deadweight and unfairness.

“If government is serious about keeping small firms away from the brink of collapse, now is the time to act. The longer this guessing game goes on, the more damage it does to small firms and the millions of jobs and communities that are dependent on them.”

The Autumn statement said the scale of support the government can offer via the EBRS post-March will be “significantly lower” than now and targeted at the “most affected” firms.