Business leaders have accused the government of leaving firms in the dark over energy bill support, after ministers push back an announcement of what aid will be on offer later next year.
The government had previously said it would update businesses before the end of the year on energy bill relief from April 2023, when an existing support scheme will end.
Business groups had called on ministers to “pull a rabbit out of the hat” at the eleventh-hour and have now accused the government of “broken promises.”
The Treasury said its present six-month energy bill relief scheme was “very expensive”, hence why it was reviewing “how to reduce the public finances’ exposure to volatile international energy prices” from the spring.
The delay was “disappointing news” for pubs and restaurants, according to Kate Nicholls, the chief executive of trade body UKHospitality, which represents more than 750 companies.
Businesses are facing “daily changing rates and contract decisions in January”, meaning that “certainty was really needed” before next year, Nicholls said.
The industry group has urged energy regulator Ofgem to call on suppliers to “deal fairly” with commercial customers, including tackling “continuing poor practices and onerous terms and conditions.”
Businesses are currently sheltered from soaring wholesale costs via the Energy Bills Relief Scheme, which runs until April and caps electricity and gas at £211 and £75 per MWh respectively.
Unlike households, their prices are not contained via an energy price cap, with firms typically instead securing one to two year agreements for medium-term gas deals.
However, hospitality bosses have previously claimed energy suppliers are “deliberately profiteering” off of the crisis by finding ways to continue elevating costs for firms.
It comes as venues are facing a mountain of costs, ranging from labour to food to energy bills.
Firms were now facing “an anxious and uncertain festive period,” according to the director general of the British Chambers of Commerce (BCC).
Almost half (47 per cent) of small or medium sized businesses have admitted they will find it tough to pay their energy bills when support expires, according to a recent BCC survey, Shevaun Haviland said.
“Without a clear plan before January, many businesses will be left vulnerable to extortionate prices at the end of March, especially SMEs and energy intensive businesses,” she added.
Bosses at these firms would have “no choice” but to begin looking at redundancies, “leaving employees vulnerable and weakening the economy further,” the BCC head added.
The BCC’s anger was echoed by the London Chamber of Commerce and Industry (LCCI), with its chief executive saying he was “furious” at the postponement.
The delay had meant that “the risk of redundancy notices across London and the UK has increased,” Richard Burge said.
He asked: “How many times can the Government, which once claimed to be pro-business, U-turn on promises and neglect businesses, the drivers of economic growth and shared prosperity?”
The LCCI called for urgent details on continued energy aid as “getting out of the cold should not mean going into the red.”
A lack of information on further support may also trigger price increases, according to Susannah Streeter, Hargreaves Lansdown’s senior investment and markets analyst.
Just under one third of businesses have already said they expect to hike the price of goods and services in January, according to a snapshot from the Office for National Statistics.
Some 39 per cent of those firms credited energy prices as the main driver for price rises.
“Now they are being kept in the dark about the level of help going forward, more firms may well be forced to hike prices as a result,” Streeter added.
A Treasury spokesperson said that it needed to “ensure longer-term affordability and value for money for the taxpayer,” after the end of its £18bn support scheme next April.
“We will announce the outcome of this review in the New Year to ensure businesses have sufficient certainty about future support before the current scheme ends in March 2023,” they added.
