Amid escalating fears that soaring energy prices will force the widespread closure of pubs, restaurants and shops, Liberal Democrats have issued a call for a £10bn bailout fund to save Britain’s small businesses.
Leader Ed Davey’s Covid-style support scheme would see 1.4m small and medium-sized enterprises (SMEs) offered grants of up to £50,000 to help them pay gas and electricity bills.
The proposal comes after major pub and brewing companies said that profits are being “wiped out” by energy price hikes of as much as 400 per cent compared to 2020, while takeaway operators warned of a threat to the future of the UK’s chip shops and curry houses.
Funded by a £10bn increase in levies on big banks, Sir Ed said that his plan would help save local high streets from being turned into “ghost towns”.
He demanded action from the new prime minister – either Liz Truss or Rishi Sunak – as soon as parliament returns from its summer break on Monday.
Speaking during a visit to Cumbria on his “farewell tour” before leaving office next week, Boris Johnson insisted on Wednesday that the government was “doing a huge amount to help the retail sector” and his successor would “unquestionably” deliver a new package of help with energy costs.
But Sir Ed said: “Our treasured high streets risk being turned into ghost towns and small businesses across the country risk being devastated by sky-rocketing energy bills, but Conservative ministers don’t seem to get it or care.
“Local shops, pubs and restaurants could all close their doors for the last time over the coming months unless the government steps up urgently.
“We need an energy bailout now to save the high street, rescue small businesses and keep prices down for families. This could be funded by reversing the Conservatives’ tax cuts for the big banks, and focusing on saving our struggling small businesses instead.
“There is no time to waste. The new Conservative prime minister must bring in legislation to protect families and businesses from soaring energy bills as soon as parliament returns on Monday.”
Under the Lib Dem plans, all of the UK’s SMEs would be able to apply for grants to cover up to 80 per cent of the increase in their power bills for one year.
Unlike domestic energy users, businesses do not qualify for the energy price cap, and many have reported receiving eye-watering increases totalling tens of thousands of pounds in recent weeks.
The party estimates that a typical small restaurant could receive £10,000 towards an increased demand of £12,500, with larger or more energy-intensive operations eligible for more.
The estimated £10bn cost of the scheme would be met by reversing planned tax cuts for big banks, which are currently seeing profits rise along with higher interest rates.
This would include the cancellation of the cut from 8 to 3 per cent in the bank surcharge currently due to take effect in April 2023.
Restoring the combined surcharge and bank levy to 2015 levels would raise £10.6bn over four years, said the Lib Dems.
The party said the bailout would reduce the risk of recession by saving thousands of businesses from closure, helping preserve jobs and keep prices down for consumers.
