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UK Chancellor Jeremy Hunt has been accused of leaving businesses facing an “anxious and uncertain” Christmas after breaking a promise to set up a new energy support package before the end of the year.
Hunt concluded that he needed more time to look at the design of the new scheme, which would involve major cuts in overall taxpayer support for business. It is also awaiting Prime Minister Rishi Sunak’s approval.
The chancellor said he would detail the plan, which runs from April to December 31 next year, but told MPs on Tuesday: “We will bring in the right package at the start of the new year.”
In September, the then prime minister Liz Truss announced plans to spend £18bn to subsidize the price cap on companies’ electricity and gas bills, but the arrangement expired at the end of March.
Ministers have said the scheme will not continue in its current form, which would cost £40bn over the course of the year. “The new scheme will be significantly less liberal,” said a government official.
The British Chambers of Commerce criticized the delay in the government’s announcement, claiming some companies would be forced to prepare potential redundancies ahead of expected sharp rises in energy bills.
“Companies deserve much better from government than broken promises for Christmas at these incredible times,” said Shevon Haviland, director-general of the British Chambers of Commerce. “They now face an anxious and uncertain festive period.”
Businesses were told late last week that ministers were close to finalizing plans to help all companies with their energy costs until spring 2024.
Business Secretary Grant Shapps told the BBC on Saturday that details would be revealed “next week”, but Hunt has since told colleagues he needs more time to get things right.
Officials said last week that Hunt was planning to opt for a scheme that would help all companies, albeit with higher price caps and therefore less taxpayer support than the current arrangement.
But Hunt’s colleagues said they were also considering a targeted scheme, although it was complicated because energy suppliers did not have key data on their business customers.
Under a more targeted approach, if it can be made to work, the Treasury will help more vulnerable sectors such as retail, leisure and hospitality, as well as users with higher energy needs.
However it is designed, government insiders said they feared it would be seen as “bad news” by businesses, especially when compared to the current arrangement.
Treasury Minister James Cartlidge said caution was needed. “We are reviewing the plan from April 2023 with the aim of reducing the exposure of public finances to volatile international energy prices,” he added.
Kate Nicholls, head of trade body UK Hospitality, said in a tweet that hotels, restaurants and other venues would be disappointed by the delay.
“Businesses are facing daily changing rates and contract decisions in January so certainty was really needed,” she said, urging regulators to pressure energy suppliers to treat business customers fairly.
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