Business

British businesses issue warning about delay to state energy support package

Companies have been warned by UK government officials that they will have to wait longer than households for help from a £150 billion energy package, given the difficulty of starting the support system before May 11.

The prospect of a multi-week delay is increasingly worrying business leaders, as hundreds of thousands of companies are nearing the end of their fixed-price energy contracts in early October.

Executives were told in recent meetings with the government of the risk the plan might not be ready until November, though officials said they still hoped the plan would go live. action next month.

“It has not been done yet,” said a government official. “I don’t know if it will come before November. There is some debate as to whether it could have been given and happened before that time. “

Companies have called on the government to act quickly to help them cover the rising “costs of doing business”, with lobby groups in sectors such as hotels and manufacturing saying many businesses are at risk. chance to fail this fall.

A support package For 28 million UK households, the annual average electricity and gas bill cap at £2,500, will come into effect from 1 October.

But a separate scheme for businesses is more complicated, as there is no system for companies that can compare to the rolling price cap already operated by Ofgem, the energy regulator, for households. family.

With no existing mechanism in place, ministers and officials are still struggling to find ways to limit companies’ energy bills.

The plan will likely require legislation, which could cause further delays as parliament is suspended until the Queen’s funeral on Monday and next week off for the party conference season in October.

Prime Minister Liz Truss, last week said businesses would be offered a package of help “equivalent” to the help offered to consumers – for at least six months.

The government will offer energy suppliers the difference between the new lower rate and the price energy retailers will charge corporate customers.

But while ministers have outlined this broad framework, they have yet to decide on the exact system to implement it.

Officials have indicated that the plan likely involves a subsidy for energy producers that would then be passed on to businesses in discounted bills, potentially using a rule Practice will be modified for this purpose.

They also suggested that companies could exit existing contracts signed at a higher rate earlier this year to benefit from energy price support.

Business leaders are also worried about a looming “edge” in the spring as the full package runs out in six months. Beyond that point, the government will only provide more targeted support to industries deemed “vulnerable” – a definition that will be phased out in the coming months.

Analysts at consulting firm Cornwall Insight last month forecast that companies renegotiating in October – a key date for the conclusion of fixed price agreements in the electricity and gas trading markets – will facing a fivefold increase in their energy costs without government support.

SEFE Energy, Britain’s largest supplier of gas to businesses, said it received “a high number of calls” from customers wanting to learn more about the UK government’s support scheme. It was forced to release an announcement on its website warns that its call handler cannot provide further details.

Previously Gazprom Energy, SEFE Energy was renamed after arrested by the German government in April from Russia.

The government did not immediately respond to a request for comment.

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