Millions of businesses across Britain are set to have their energy bills capped for six months from as early as October, as ministers battle to keep many afloat amid soaring prices.
Independent local pubs will also be among a smaller number who will receive longer-term help, Liz Truss indicated on a visit to New York on Tuesday.
But business leaders said more support was needed as they warned against what they said was a “cliff edge” in aid. And Tory MPs said the scale of the initial package, to be unveiled by business secretary Jacob Rees-Mogg on Wednesday, would have to be “huge” if the government is to save the high street this winter.
Many businesses have reported projected increases in their energy costs of more than 500 per cent and some have already been forced to close.
On a trip to a United Nations summit, the prime minister said soaring energy bills were a “price worth paying” to ensure the UK’s “long-term security” after Russia’s invasion of Ukraine caused costs to spike.
She also reiterated her claim she would not tell Britons to ration energy use this winter as Russian president Vladimir Putin limits gas supplies to Europe.
Liz Truss during her visit to the US
But she reassured some “vulnerable” businesses that the government would offer them longer-term support.
Mr Rees-Mogg is conducting a three-month review of which businesses will be included. But Ms Truss told ITV News: “I can reassure people who own pubs that they are exactly the type of businesses that will get that longer-term support.”
Earlier this month Ms Truss announced a multibillion-pound price guarantee that will cap average annual household bills at £2,500.
Mr Rees-Mogg is expected to set out plans for a similar scheme for the UK’s businesses. It is thought that the measure could be introduced as early as October, rather than in November, as originally feared. Government sources have previously made clear that, if it is the late date, the money would be backdated.
Unlike the cap for household bills, which will last two years, the scheme for businesses will initially be limited to six months. But business groups and Ms Truss’s own MPs warned ministers not to underestimate the devastation skyrocketing prices could wreak.
One Tory MP told The Independent that the support package “is going to have to be enough to save the high street and save consumers and businesses. It is going to have to be huge”. He added: “If it is, it also might just save the Conservative government.”
One senior Tory MP said that businesses “have to be able to see the cavalry coming over the hill”.
Business chiefs warned the six-month plan was too short and called for more support beyond a price cap.
They told The Independent that they fear ministers will fail to offer enough clarity, as they urged the government to spell out exactly how and when bills will be cut.
Hospitality groups wrote to chancellor Kwasi Kwarteng on Tuesday, warning that the failure to provide enough detail could cause some businesses to collapse.
Liz Truss and Kwasi Kwarteng
The trade bodies said business owners had to know now whether they should sign up to new energy contracts.
“Most are still in the dark as to how the guarantee might help them,” said the letter signed by UKHospitality, the British Beer and Pub Association and other groups. “More support is needed – as well as a plan beyond the next six months.”
They also called on Mr Kwarteng to cut VAT on food and drink sales in hospitality, as well as cancelling business rates for pubs and restaurants for the remainder of the financial year.
Tina McKenzie of the Federation of Small Businesses (FSB) told The Independent: “Energy help must not result in a cliff-edge after six months.” She also warned there are “no such things as ‘vulnerable sectors’ and ‘non-vulnerable sectors’ when it comes to these energy hikes”.
Michael Kill, chief executive of Night Time Industries Association, which has warned that seven in 10 pubs will close this winter without an urgent rescue package, said: “Without a very clear understanding of how this works, many will go over the edge in the next couple of months.”
French president Emmanuel Macron has called for a 10 per cent reduction in energy use this winter as the EU tells member states to lower consumption. But Ms Truss suggested it was up to consumers. “Ultimately everyone makes their own decisions about how they decide to do those things,” she said.
