Decision on energy bill support for businesses postponed

A decision on extending help for businesses facing soaring energy bills will not be made until the new year, the Treasury has said.

Currently wholesale gas and electricity prices have been fixed for firms from October until March 2023, but the help is under review due to the cost.

Ministers had promised to make an announcement before the end of 2022, and the delay angered business groups.

They said it was creating uncertainty for firms worried about their bills.

"Disappointing news that government has also postponed announcement on future energy support until the New Year rather than before Christmas as previously announced," tweeted Kate Nicholls, boss of UK Hospitality, which represents hotels, restaurants and others in the industry.

"Businesses are facing daily changing rates and contract decisions in Jan so certainty was really needed."

Unlike households, businesses are not covered in normal times by an energy price cap, which limits the amount suppliers can charge per unit of energy.

But after energy prices spiked this year, the government's Energy Bill Relief Scheme fixed costs, providing a lifeline for many firms that risked going bust without the support.

In October the government said it would review the scheme due to its high cost to taxpayers and publish those findings by the end of this year. Officials are considering options to extend support only for "vulnerable businesses".

On Monday, the Treasury said its final decision would now not be announced until the start of 2023.

"We are protecting businesses from high energy costs this winter, caused by Putin's invasion of Ukraine, through the six-month £18bn Energy Bill Relief Scheme," a spokesperson said.

• Firms' energy bills to be cut by half this winter

"However, this is very expensive, and we need to ensure longer-term affordability and value for money for the taxpayer.

"That is why we are currently carrying out a review with the aim of reducing the public finances' exposure to volatile international energy prices from April 2023. We will announce the outcome of this review in the New Year to ensure businesses have sufficient certainty about future support before the current scheme ends in March 2023."

Business groups have been calling for the government to provide certainty to businesses on energy support.

On Monday, the British Chambers of Commerce (BCC) urged the government to make an announcement before Christmas, saying many of its members would struggle to pay their energy bills when the scheme comes to an end.

"Just over a month ago, the chancellor promised businesses that they would receive a plan on the future of the energy support package before the end of the year. With 24 hours left until parliament rises, businesses have one simple question: 'Where is this plan?'" said Shevaun Haviland, its director general.

"Businesses now face an anxious and uncertain festive period, unable to plan for the New Year. "