Energy companies including Shell, Centrica and Ovo have called on the UK government to introduce Covid-style support schemes to help businesses cope with soaring gas and electricity bills.
In a letter to Chancellor Nadhim Zahawi on Friday, industry lobby group Energy UK, which represents around 100 suppliers and retailers, said it feared a tenfold increase in wholesale gas prices from the start of 2021 n affects the “viability of small businesses”. », as well as local authorities, schools, leisure centers and hospitals.
The group has urged the government to introduce grants similar to the £45billion paid out by local authorities during the coronavirus pandemic, a Treasury-backed loan scheme and corporate rate waivers. He also called for value added tax to be removed from energy bills.
Dan Alchin, Energy UK’s regulatory director, said: “The government has helped support businesses during the pandemic and unfortunately this current crisis is of a similar scale for many of them – threatening closures. , job losses and higher consumer prices.
“Having worked so hard to help so many of these customers through a crisis, we must do everything we can to avoid losing them to this one.”
Although households are protected from sudden wholesale gas price fluctuations by a price cap, there are no such measures for businesses.
Many companies have so far been protected by long-term energy contracts, which are due to be renegotiated this month. Some are struggling to find deals.
MEPs are increasingly aware of the potential ‘iceberg’ impact of rising energy bills on businesses in the months to come.
Foreign Secretary Liz Truss, the favorite to become Britain’s next prime minister, has moved from a laissez-faire ‘no handouts’ stance to promising to help households and businesses cope with the shock energy.
Zahawi is drafting a series of proposals to support businesses through the looming crisis, including reductions in VAT and corporate rates, as well as specific tax relief for energy-intensive industries.
He told The Times on Friday that failure to act could force many businesses into bankruptcy and cause long-term economic “scars”.
Britain’s Chambers of Commerce on Friday urged the government to come up with a “comprehensive plan” to help businesses through the crisis, including emergency Covid-style grants, a reduction in VAT on energy bills and regulation increase in the energy market for companies.
“Time is running out, the government must step up and do what is necessary to protect businesses, livelihoods and jobs,” said Alex Veitch, director of policy and public affairs at BCC.
Mathew Lawrence, director of the Common Wealth think tank, welcomed calls to support businesses but described the recommended measures as a “temporary fix that does little to fix a failing market”.
“Some of these companies asking for business support are themselves making substantial profits during the current crisis, which raises questions as to why they cannot dip into their own pockets,” he added. .
The British government did not immediately respond to a request for comment.
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