Businesses will have their energy bills frozen under a package of support announced today (8 August) by prime minister Liz Truss, although for just six months rather than the two years being granted to households.
Truss said the new energy price guarantee means that, from October, no household will pay more than £2,500 a year for energy bills (based on average use) for each of the next two years, which will be achieved by the government securing the wholesale price for energy.
Businesses, charities and public sector organisations will be offered “an equivalent guarantee”, Truss added, but for just six months, after which the government will provide further support to “vulnerable sectors” including hospitality.
Business secretary Jacob Rees-Mogg will “work with businesses to review where this should be targeted to make sure those most in need get support”, Truss said, adding: “In the meantime, companies with the wherewithal need to be looking for ways they can improve energy efficiency and increase direct energy generation.”
At the British Property Federation, chief executive Melanie Leech said: “The prime minister has delivered on her commitment to provide immediate support on soaring energy costs for individuals and businesses.
“Today’s announcement also recognises that vulnerable sectors will need further targeted support, and the business secretary’s review must look at all options including the crippling burden of business rates – the government must freeze the business rates multiplier for the next financial year to avoid significant inflationary uplifts and make sure that businesses whose rates are being reduced because of the last revaluation get the benefit of this reduction straight away.”
Steve Malkin, chief executive of sustainability group Planet Mark, called for further help for small and medium-sized businesses, which he said could be backed with a windfall tax on energy companies – a move Truss again ruled out today.
“Freezing energy bills until 2024 will provide some light relief to consumers and small businesses, but this package of measures doesn’t go nearly far enough,” Malkin said. “Giving businesses just six months of cover is merely a stop-gap, while freezing bills at rates which are still too high for many to afford – especially Britain’s 6m small and medium-sized firms – is another sticking plaster solution for firms already struggling with a combination of rising costs and falling sales as households tighten their belts.”
Avinav Nigam, co-founder and chief operating officer of IMMO, a residential investment platform, said: “With a price tag of £130bn, today’s measures to help consumers and businesses deal with sky-high energy prices have come at an important time. They could have also helped pay for retrofitting close to half the UK’s housing stock.
“Clearly, action is needed, and with the government still counting the cost of Covid while staring down the barrel of recession, taxpayer money has to be targeted in its use. That’s why the government should look to tap into the growing weight of institutional capital that is keen to ‘do green and do good’, and increasingly sees residential for rent as an attractive alternative to fixed income, to help fund the retrofitting of Britain’s housing stock.”
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