Firms’ relief at new energy deal

BUSINESS leaders and consumer groups say the Government’s new Energy Price Guarantee will bring “huge relief to millions”.

Many firms, pushed to the brink by Covid, feared the energy crisis would be the last nail in the coffin as gas and electricity bills soared.

But Liz Truss’s announcement of help was widely welcomed.

Rocio Concha, director at consumer group Which?, said: “This is a bold intervention that will provide huge relief for many and prevent millions of households being left in the cold.”

West Midlands Mayor Andy Street said: “It’ll be hugely welcomed. The Prime Minister has used the words, ‘This is a crisis’. I think that is a very, very good sign.

“It looks as though there’s going to be really important support for small businesses. This hasn’t been talked about as much...but it looks as though there’s going to be decisive action.

“If you’re a pub, a restaurant or cafe facing the winter, this could be the difference between staying in business and going out of business.”

Targeted

Ms Truss announced a £2,500 price cap freeze for households for the next two years – and a similar proposal for business relief will be published in the next few days.

For firms and other non-domestic users, such as schools and hospitals which are not covered by the existing price cap, a six-month scheme will offer equivalent support.

After that there will be ongoing help with a review in three months time to decide where it should be targeted.

Sara Hall, founder of online gift shop The Silk Purse Guild, said the help “could not come soon enough”.

She added: “The energy bill crisis is piercing the very heart of small businesses. I work with creatives and artists who tell me daily they are struggling to survive.

“There is a tangible, underlying fear running through the UK’s small business community. The crisis is having an impact on mental health as well as financial security.”

Graham Cox, founder of website SelfEmployedMortageHub.com, said the Premier’s plan was “long overdue but welcome nevertheless”.

He added: “Capping energy to £2,500 is double what people were paying in January, so it will still leave millions of households struggling to keep their homes warm this winter. But at least it provides certainty.”

The move was welcomed by the care sector. Adrian Forth, director at Peace

Hospice Care, in Watford, said: “We’re pleased the Government has finally acted on energy prices for businesses and charities.

“This has been a really worrying time. If we had been left to deal with the situation with no intervention, it may well have been unsustainable as we were seeing potentially enormous price increases on our bills.

“We hope this price cap will allow us a small amount of breathing space so we can continue to provide the high standard of care we offer.”

Finance experts also welcomed the energy price guarantee.

Steven Cameron, pensions director at Aegon, said it will help the Treasury measure the UK’s future finances.

He said: “The two-year cap not only provides much needed support for households, but it will also help to dampen the headline inflation rate.

Many state-related benefits are uprated by inflation, so this support should help to manage the affordability of Government funding.”

Scott Gallacher, of independent financial advisers Rowley Turton, said: “Millions of hardworking families will be relieved that their bills will be capped this Christmas.”

Imran Hussain, of Harmony Financial Services, labelled Ms Truss’s announcement: “A fairly impressive start from the new PM.”

However, some critics said her energy price guarantee had not been set at a low enough level.

Samuel Mather-Holgate, of advisory firm Mather & Murray Financial, said: “What a disappointment. We were all hoping that, at worst, prices would be kept as they are.

“But households are expected to find another £600 per year from

October. This will put some families out on the street.

“With mortgage interest rates on the rise, too, the cost of living is too high for many low and middle income families. Liz Truss needs to look again at this with serious urgency.”

Ed Rimmer, chief executive of lender Time Finance, last night called for more detail on help for businesses.

He said: “The fact exact details about company energy bills are yet to be outlined leaves many businesses in the lurch. Ultimately, this makes forecasting business plans impossible.

“The damage caused by this economic stretch is already in effect, with many firms’ financial challenges now rising to unmanageable levels.

“Businesses now need a clear and direct approach to the energy crisis so they can plan their finances for the challenging winter ahead.”