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Saturday, Jul 05, 2025

Detail on promised energy help for firms delayed

Detail on promised energy help for firms delayed

Government support for businesses struggling with energy bills may not arrive until November.

However, the help would be backdated, and cover the period from 1 October, a government spokesperson said.

Last week Prime Minister Liz Truss said firms would get "equivalent support" to the help that was announced for households.

But companies have been in the dark as to what that actually means, including how much support they will get.

A government spokesperson said: "We will confirm further details of the business support scheme next week. The scheme will support businesses with their October energy bills, including through backdating if necessary."

The help may be backdated because the precise mechanism and amount of support may not be finalised till November, a government source said.

The support for business was also time-limited to six months, with an option to extend support for "vulnerable businesses" - but there was little indication of what that means either.
Alan Soady from The Federation for Small Business told the BBC "all businesses are vulnerable if they are energy users and let's face it, the problems in the gas market don't look they are going away in six months".

Unlike households - where a cap on the unit price for gas and electricity means an average household will pay £2,500 per year for energy - there is no such mechanism for businesses.

Firms have a huge variety of different contracts based on the intensity of their usage and the mix between gas and electricity.

Many big businesses also have their own energy buying departments and systems to insure themselves, or "hedge", against extreme price movements.

Also, unlike households, there is no price cap, and therefore no moment when everyone's bills will change.

Firms typically have one or two-year fixed contracts, but a significant number - the CBI estimates a third - traditionally come up for renewal before winter and in October.

The Department for Business, Energy and Industrial Strategy said meetings continue, to thrash out the details of their approach, and the business of government goes on during the official mourning period.

That will be little comfort to a business owner I spoke to last week agonising over whether to hand back the keys to his premises ahead of this winter.

The Prime Minister and Chancellor have written a blank cheque trying to avert a recession.

Households' knowledge their bills are fixed for the next two years will help in that endeavour, but few businesses will invest, hire, or sign a new lease until they know what help is coming their way, when and for how long.

If recession is to be avoided, the government will need to provide more detail, and reassurance as soon as possible.

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