Last week Liz Truss announced she would be stepping down as Prime Minister. In her live TV announcement, she said she cannot deliver the mandate she promised when she was elected. When coming into the PM position, Truss promised a long-term approach to help tackle the decades of short-term thinking that had left the UK in an energy crisis.
However, the number of U-turns on her policies has left the energy industry as well as consumers in even more turmoil than before.
Jeremy Hunt’s announcement that the household energy cap will be stopped after six months left families worried about energy bills.
Businesses were hoping for more support after the energy price cap came to an end in April. Hunt said that business support would be tailored towards the industries that need it most and would focus on incentivising energy-efficient measures. This is not what most businesses had hoped for.
Liz Truss also rejected windfall taxes to help pay for energy support. These ended up coming into measure anyway as there is now a cap on renewable generation. This will help cover the cost of some of the energy support for households and businesses.
The windfall U-turn and the turnaround of the mini budget were forced by turmoil in the markets. However, this has led to businesses and household’s having a lack of trust in what help the government are going to provide for their energy bills.
Tax U-turns affecting businesses
As well as U-turns in the energy sector that are affecting businesses, a lot of changes had to be made by Jeremy Hunt from Kwasi Kwarteng’s mini budget.
Under the mini-budget corporation tax was to stay at 19%. However, Hunt reversed this, businesses will now be paying a 25% corporation tax from next April. This has left many businesses worried further about how they will cope with this as well as higher energy bills once the business energy price cap ends.
What does this mean for business support with energy prices?
When the energy price support for business customers was first set out it was said that energy prices would be capped for eligible customers until April 2023. However, Jeremy Hunt has shed light on what this support could entail for businesses.
He said that any support for business would be targeted to those most affected and the new approach would be to incentive energy efficiency. This is not likely the support businesses were hoping for and could leave many worried about how they are going to survive once prices go back to normal in April.
The British Chamber of Commerce has said that the government need to commit to a full consultation with firms ahead of April to provide some clarity on what their business can expect going into next Summer.
What industries are struggling with the energy crisis the most?
Due to the changes in Government, especially over the past few weeks, businesses are finding it almost impossible to plan and make investment decisions.
Businesses that are power and gas-intensive are most likely going to be hit the hardest by price changes. For example, those in the manufacturing and construction sectors have been struggling to keep factories going since the beginning of the energy crisis. With further economic issues, these businesses could be in an even worse position by next year.
What can your business do to avoid higher gas and power prices?
Now that the energy support for business is in full swing, if your business is not already on a fixed rate contract now would be the best time to do so. Those on fixed-rate contracts will be paying significantly lower than those on variable, deemed or out-of-contract rates. To find out more information on the business energy price cap read more here. If you wish to speak to one of our consultants for advice, then contact us today.
Although the price cap may shield your business for the next six months, this support is eventually going to stop. To make sure your business doesn’t suffer extremely high energy bills next year you could also work on reducing the amount of energy your business consumes. At Resolve Net Zero we have a range of services that could help you to reduce your consumption and save money. Contact us today to find out more.
If you're looking to save money on your energy bills then why not get in touch today? The relationships Resolve Energy has developed with over 24 of the UK’s biggest business energy suppliers allows our energy experts to source the best business energy rates available for your company right when you need them. Request a free quote today and start saving money on your energy.