UK Government listens to business calls for help with rising energy bills, but only for six months

14th September 2022

UK Government energy support package welcome but lacks the longer-term certainty that businesses need

Following intense lobbying from the business community, the UK Government has confirmed that companies will have their energy costs capped at a level equivalent to the household energy cap. The announcement by the new Prime Minister came after many businesses said that massive increases in energy costs were going to push them to the point where they might not be able to continue trading. The cap will take effect from October and will be in place for six months. It will cover all businesses. After that the Government has said that there will be “focused support for vulnerable industries.” No details have been released yet about exactly how the cap will operate and what sectors or industries will receive help after the initial six-month period.

Alan Mitchell, Chief Executive of Fife Chamber, said of the price cap: “The cap is, of course, welcome. It is no exaggeration to say that many businesses in Fife would have been forced to close if energy prices weren’t capped. The Government should get some credit for listening and acting but what they have announced does not go far enough. It is simply unfair that the domestic energy cap applies across all households for two years, but it only applies to all businesses for six months. Many businesses will see this vital support end when they still need it, because it seems inconceivable that energy will be appreciably cheaper in six months. Until we know what ‘focused support’ means and what the Government defines as ‘vulnerable industries’, we simply have no idea how many businesses will get ongoing support or for how long. So, the next few months will see many companies still fearing for their future. That is unacceptable. If every household is getting help for two years, irrespective of their financial circumstances, every business should enjoy the same guarantee. Energy caps will be of scant value to households where people have no job because their employer couldn’t afford to stay in business.”

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