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Perspectives - Inside British Politics

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Overview

Truss’ energy statement provides businesses with support to meet their energy bills for 6 months (compared to 2 years for households). Details of how the scheme will work will be announced shortly. Businesses on fixed rate contracts that are coming to an end, on a new contract recently agreed or variable contracts will be eligible for the new government guaranteed deal.

Mr Kwarteng will detail how the whole plan will be funded and explain how the business energy support plan will work during the fiscal announcement, which looks set to occur around 22/23 September 2022. Further targeted support for specific industries like hospitality is set to follow the 6-month period. A review in 3 months is to be led by the BEIS Secretary to decide which sectors should benefit, the terms of this review have not yet been revealed.

Below we identify the next steps for business, explain the main features of the plan we do know, those that remain to be clarified and some of the options the Government may consider. We explore the Government’s thinking on ‘critical infrastructure’ and how a business might qualify. We provide examples of how other European countries are responding to this crisis and identify some important dates for your diary on when changes to energy policy will occur.

Next steps for business

  • Contingency planning: Businesses with the means are being urged to invest in energy efficiency and boosting energy generation. Putting a plan in place is essential. This will become important when households are subject to a public information campaign to encourage them to use less energy as this will increase pressure on business.

  • Vulnerable businesses: Need to engage with BEIS to show they are ‘vulnerable’ if they need help with bills beyond the 6 months. Businesses that support key Government aims around levelling up or preserve aspects of national life look likely to receive support.

  • Critical infrastructure: Businesses may want to ensure they qualify as part of ‘critical’ national infrastructure in case businesses are asked to curtail demand to protect households as is planned in other European nations. Businesses that provide essential services could make a compelling case.

  • Energy sector: Businesses can respond to the energy regulation review. The push to boost supply means critical infrastructure projects that otherwise would be delayed or face substantial opposition may now enjoy more state support.

  • Heavy energy using sectors: These will face a particular challenge to make the case for their access to power. Mapping the industries that would be affected by an energy shutoff is key to reveal an industries footprint for sectors such as tech/data businesses. The UK Government’s commitment to economic growth and increasing the UK trend rate to 2.5% could also prove useful in making the case for continued power supplies.

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