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Britain’s biggest business group has urged ministers to decide quickly which industries will receive energy aid from next spring as hundreds of firms are set to more than double their bills.
The Confederation of British Industry called on the government to urgently reveal details of how it plans to extend the energy bill relief scheme for companies with large bills beyond March 2023. Public sector bodies were introduced in October to replicate the support given to households to absorb the shock of rapidly rising energy bills.
The government has said that more support will be provided for firms in certain industries after that date but has not yet said so. Businesses were expecting clarity before Christmas as they draft financial plans for 2023.
Energy intensive industries such as steel, chemicals, fertilizers and glass manufacturers are expected to be widely included. However, the CBI called on the government to go further, including businesses such as food and beverage manufacturers and car makers.
The lobby group said a survey of nearly 700 companies found that companies expect their bills to more than double from April without the intervention.
CBI Chief Policy Director Matthew Fell said: “The high cost of energy is dominating the decisions that businesses are making day in and day out.
“There are no easy answers to all of this, but the government must continue to help the most vulnerable companies to remain competitive, build resilience and, in some cases, avoid collapse.”
Fell said the CBI supported the decision to target the scheme from April to limit costs but said “businesses need to know whether they are eligible before the end of the year”.
“We should also heed the lessons from the pandemic, where additional cash flows provide support, in particular [small to medium-size enterprises]It was important to look at businesses during this period,” Fell added.
The CBI wants businesses to be able to defer their energy bills if necessary and grant funding to be provided by local authorities to mitigate the effects of the predicted recession.
Some companies have said they will have to cut staff, cut capital investment and increase energy costs to their customers if bills rise sharply in April.
The Federation of Small Businesses said nearly half of all small firms expect to raise prices further in response to the crisis if support ends in April, and more than a third have frozen growth plans due to rising energy costs.
The bill has risen as wholesale gas prices have risen sharply following Russia’s invasion of Ukraine. Prices are expected to remain high next year as European countries compete for gas to replace Russian supplies.
Avera Foods, one of the UK’s largest suppliers of chicken and turkey to supermarkets and restaurants, said: “Energy costs are difficult to forecast for next year, but are clearly expected to rise significantly.
“While we’re making good progress in our plans to become more energy efficient, we’re heavy energy users throughout our process and we’re producing fresh food that has to be refrigerated, we can’t ‘just turn it off.’
“Businesses like ours, who have no choice but to cut energy use, must maintain a price cap to ensure food security for the UK and to ensure British families are fed.”
Pubs and breweries across the UK will be forced to close their doors for good as they face rocketing losses without more energy support, industry bosses said this week.
Andy Wood, chief executive of brewer Ednams, which hosts regular free meet-ups in its pubs for people wanting to stay warm, told the BBC: “We would urge the Government to consider the extended energy relief bill that is being passed. Parliament and business rates recognize the role that hospitality and pubs play in their local communities.”
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