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Firms' energy bills to be cut this winter

ended 21. September 2022

The energy bills of UK businesses will be cut by roughly half their expected level this winter under a sizeable government support package announced today. The Energy Bill Relief Scheme will fix gas and electricity prices for all firms for six months from 1 October. It follows the announcement of a £150bn plan to help households with their energy bills for the next two years. The hope is that this latest support will help prevent mass bankruptcies and job losses. What are you views on this?

12 responses from the Newspage community

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Rob Peters
Principal at Simple Fast Mortgage
The Energy Bill Relief Scheme could, in theory, provide much needed relief to businesses struggling with increased costs of energy. However, in order to know whether it will be effective or not, we first have to understand this highly complex scheme and the tangible benefits it could provide. With the calculation based on multiple variables, dependent on the tariff and date of contract, this is no easy feat. Luckily, there is no need to apply and energy suppliers will automatically apply any relief available to businesses. This means most of the population will just wait for their next energy bill to see what their actual saving is.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Something needed to be done for businesses, and this will definitely help over the winter. The problem is that the relief is for such a short period. The only way this can be addressed is by coming up with a solution to stabilise energy prices at a reasonable level. Just like the synchronised stimulus into western economies in 2008 with historic central bank interest rate cuts and high quantitative easing, there needs to be something similar into renewal energy that will see energy security, and long term cheaper options.
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Imran Hussain
Director at Harmony Financial Services
It may be a relief for any business hanging on in there right now but It may just be too little too late for many small businesses that have closed their doors in the past 3 months due to crippling costs of utilities, and with the relief only for such a short period the government are simply kicking the issues down the road for the next government when they will no longer be in power.
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Jonathan Burridge
Founding Adviser at We Are Money
It is optimistic that in six months either prices will have reduced or businesses will have adjusted to be able to absorb them at their higher level. But it is a start, offers a degree of certainty and will mean that many business owners can make some short-term plans.
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Esme Marshwitch
Owner at The Glassy Witch
This isn't a cut at all. The energy firms have been making huge profits already on these prices, so all this is is borrowing money at the taxpayer's expense, to protect profits that are held privately. It is sickening to see a government so intent on protecting the wealth of the few, while simultaneously expecting gratitude for doing nothing at all to correct the massive disparities in society.
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Marcus Wright
Managing Director at Bolton Business Finance
There is no doubt that if energy bills were allowed to spiral out of control, then many businesses small and large would go under. So this will clearly be a relief for some businesses. However, for some high energy usage businesses such as takeaways this might not be sufficient to save them. I just wonder how much this is going to cost the country and why it is not actually increasing cheap energy supplies, which is what we really need.
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Shirley Leader
Owner at Velvet & Rose
The help with energy bills is very much welcome. We did originally hear that this would be for vulnerable businesses so are hoping it will cover all businesses. Furthermore, we would also welcome capped charges for standing charges as well as unit charges because after six months we will still be in a vulnerable position if this is not addressed.
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Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
This is a welcome relief for UK businesses that were asked to wait for the government’s plan when it introduced the energy bill cap for households earlier this month. Truss' energy package will certainly contribute to pulling down the UK’s soaring inflation rate but by how much and for how long nobody knows as it takes a few quarters for inflation figures to reflect adjustments in consumption. In addition, businesses are not fully guaranteed of support after the relief expires, and they’re most likely to still pass on the higher rate to customers eventually. It’s also likely that should the program be extended, it will be funded through windfall and wealth taxes, although Truss has ruled this out during her speech.
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Jenny Blyth
Small business owner at Storm in a Teacup Gifts
I applaud the news that something is being done for businesses but unfortunately I work from home and this morning was told that my own monthly direct debit will be increasing. Not sure this plan has been thought through. Not all businesses have physical stores.
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Thom Baker
Owner/Director at Thom Baker Consultancy
As welcome as this is be as a short term fix, much like the help provided to households, this might just be another handout to energy companies. If this money was available to businesses to make long term investment in energy efficiency, insulation and the renewables that we desperately need, we would not only be solving the pressing problem but safeguarding the future for our businesses.
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Sheju John
Founder at Parakeet Books
Yes the scheme is helpful to Parakeet Books, particularly because our printers and the makers of our merchandise are UK-based. But our worry is who is going to pay for this down the line, we fear it will be the future generations who ultimately have to pay to bail us out.
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Dr Jackie Mulligan
Founder at ShopAppy
This announcement has come too late for many small businesses, and the length of time they may need to wait for payments to be backdated will exacerbate the already critical cashflow issues they are facing. Whilst it's good to finally have some support announced, small businesses, particularly those that line our high streets, need to be helped right now. There is no time for delay. Most businesses will also be asking, what happens after six months? One set of measures for all businesses misses the fact that certain business types and sectors are, and have been, disproportionately impacted by Covid and the cost of living crisis. Wider reforms that are longer term need to be in place that help level things up. Losing local shops and services has a far bigger impact on communities and the Government needs to focus on that, because there are long term social as well as economic costs.