Energy UK is calling on the new Prime Minister to set out measures to support non-domestic customers amid rising energy bills, similar to those witnessed during the covid pandemic.
With the next Prime Minister set to be announced today (5 September), Energy UK has written to the Chancellor of the Exchequer detailing a need to support businesses like pubs and restaurants as well as local authorities, schools, leisure centres and hospitals to allow them to continue to operate despite surging energy costs.
Pubs and breweries face significant risks this winter amid rising energy costs. This has already prompted the British Beer and Pub Association (BBPA) to call for “urgent action” from the UK Government in order to prevent catastrophe.
According to Energy UK, non-domestic customers are currently looking to renew their energy deals as fixed term contracts expire. However, with wholesale gas prices having climbed to ten times the level they were at the start of last year, customers are finding energy costs have risen substantially since they signed up to their previous deals.
In order to maintain businesses during this uncertain period the trade association is calling on the government to mobilise support schemes like those witnessed throughout the covid pandemic.
The proposed changes would include government supported loan schemes, government grants, removing VAT from energy bills, business rates support and the establishment of a high-level energy expert panel.
“There’s understandably been a lot of focus on the price rises facing households, but businesses are also having to cope with sharply increased energy bills,” said Dan Alchin, director of regulation at Energy UK.
“Over the past year, the cost of energy, especially gas, has climbed to levels that nobody expected so it can be a very nasty shock for such customers when they see how that has fed through to prices. The Government helped support businesses through the pandemic and sadly, this current crisis is of a similar magnitude for many of them – threatening closures, job cuts and higher consumer prices.
“It also presents huge difficulties for public sector customers like schools, hospitals, local authorities, leisure centres and many other places serving their local communities.”
Energy UK called on the government to integrate further supported loan schemes, arguing more loan guarantee schemes could be introduced by the government to support businesses throughout this period.
Government grants is another area to develop states Energy UK. Over the course of the pandemic, £45 billion had been made available via local authorities to businesses. Grants could be introduced targeting areas of the energy crisis and offer varying levels of support.
Energy UK is also calling on the government to remove VAT from energy bills, which is currently set at 20% on non-domestic energy bills in contrast to domestic bills at 5%.
Business rate support could also provide relief for businesses according to Energy UK. The government provided various exemptions and reliefs to businesses to help them through the pandemic and could do similar here.
The final recommendation is to establish a high-level energy expert panel that is tasked with tackling high retail energy prices for both domestic and non-domestic consumers. This includes a glide path for moving away from the deficit tariff arrangements proposed to help domestic customers manage their energy costs through 2023.
“Given the consequences for these customers, as well as the wider economy, we are urging the new Prime Minister and government to put support in place as they did during the pandemic. Having worked so hard to get so many of these customers through one crisis, we need to do everything possible to avoid losing them to this one,” concluded Alchin.
