A leading convenience store owners’ body has called government’s new support package for businesses as “inadequate, poorly targeted and ultimately pointless”. It came as UK government announced plans on Monday (9) to scale back energy subsidies for businesses for the next financial year to 5.5 billion pounds, calling the current level of support as “unsustainably expensive”.
The current six-month programme of energy support that is due to expire at the end of March was predicted to cost 18.4 billion pounds when the government’s budget watchdog published forecasts in November.
“My top priority is tackling the rising cost of living – something that both families and businesses are struggling with,” finance minister Jeremy Hunt said in a statement. “That means taking difficult decisions to bring down inflation while giving as much support to families and business as we are able.”
Calling the government’s new support package for businesses as “inadequate, poorly targeted and ultimately pointless”, the Association of Convenience Stores (ACS) predicts a massive hike in energy costs from April 2023.
The government is currently reducing business energy bills by effectively controlling the wholesale price that is the main component of businesses’ energy bills. After extensive consultation, the government will be moving away from this model in April and instead providing a subsidy to electricity bills of 1.96p per kilowatt hour for all business customers paying over a minimum rate.
ACS chief executive James Lowman said that the new package of business support is woefully inadequate.
“By moving to a subsidy on energy bills, and failing to target specific sectors or those worst affected, the government has spread £5.5bn support over every type of business, the result being a level of subsidy that is ultimately pointless.
“Make no mistake, local shops will go out of business if the government does not rethink its approach before April. Retailers who struck contracts at the peak of the wholesale energy price will still see their bills quadruple even with this meagre support, blowing their commercial model out of the water. Our sector is resilient, plays a vital role in communities, and in fact offers energy bill payment facilities for millions of customers including the most vulnerable. This policy will have very serious consequences for our members and the customers and communities they serve.
“It is not too late for the Chancellor to reconsider the support he is offering, to find practical ways of targeting it more effectively, and to save the businesses who he is effectively consigning to closure with his decision,” Lowman said.