UK Chancellor of the Exchequer Jeremy Hunt delayed a decision on the support businesses will receive for their energy bills after March, sparking consternation from industry groups.
(Bloomberg) — UK Chancellor of the Exchequer Jeremy Hunt delayed a decision on the support businesses will receive for their energy bills after March, sparking consternation from industry groups.
While Hunt has extended assistance for domestic energy bills, he’s yet to say how much aid will be provided to companies after the current £18 billion ($22 billion) 6-month program ends. At his Autumn Statement last month, the chancellor pledged an announcement by year-end on a more targeted approach, to take effect from April.
But the announcement will now be made “early in the new year,” Hunt told the House of Commons on Tuesday. “This house will not have to wait very long for that announcement.”
The delay leaves businesses — ranging from hospitals and schools to multinational corporations — unable to plan for the energy costs they’ll face at the end of the first quarter. The current aid program subsidizes their power and gas bills to mitigate the pain of surging wholesale costs that have been exacerbated by Russia’s war in Ukraine, and sanctions imposed on the aggressor.
The program is credited by industry groups with saving many firms from major financial losses and even collapse. However, they will now go into Christmas not knowing whether they’ll still be eligible for help from April.
‘In Limbo’
The decision means firms are “now left in limbo,” said Martin McTague, national chairman of the Federation of Small Businesses. “What’s supposed to be a festive period bringing back the small business spirit has now sadly been stolen by a grinch government, who’s under the illusion that small firms can plan on a less than three-month horizon.”
Hunt has previously said he wants to focus on helping the most vulnerable industries. But in recent weeks, he and his officials have starting learning toward providing all sectors of the economy with more limited support, according to a person with knowledge of the discussions. The amount is yet to be decided, said the person, who spoke on condition of anonymity because the plans aren’t finalized.
The reason for the delayed decision is because it is a “very complex” policy area and the government wants to “make sure we get the offer right,” Prime Minister Rishi Sunak’s official spokesman Max Blain told reporters on Tuesday.
Businesses in Britain expect energy costs to more than double next year if the government support package came to an end, according to a survey of 700 firms by the Confederation of British Industry.
British Chambers of Commerce Director General Shevaun Haviland said the lack of a decision means “many businesses will be left vulnerable to extortionate prices at the end of March.”
“Those businesses will have no choice but to start preparing their workforce for potential redundancies,” Haviland said in an e-mailed statement. “Now more than ever, we need to provide businesses with confidence so they can invest.”
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