Some north and north-east businesses will breathe a sigh of relief after the UK Government finally moved to plug the energy cap gap.
But for others the change is too little and too late to keep their enterprises alive.
New Prime Minister Liz Truss today pledged to help firms through the cost-of-doing-business crisis.
I’m ending the short-term thinking on energy once and for all.
I’m acting now so people and businesses are supported with a new Energy Price Guarantee.
I will tackle the root cause of the issue by boosting domestic energy supply to ensure we’re not in this position ever again. pic.twitter.com/khsfmH9B7Z
— Liz Truss (@trussliz) September 8, 2022
She said businesses would get help with their energy costs this winter.
They will benefit from an energy price guarantee “equivalent” to one being offered to households.
Firms on equal footing with households – for six months
From October 1 a typical household will pay no more than £2,500 per year for each of the next two years.
But the support for business, charities and public sector organisations will last only six months.
Ms Truss said further support would be made available to “vulnerable” sectors, such as pubs and restaurants.
She added: “In the meantime, companies with the wherewithal need to be looking for ways they can improve energy efficiency and increase direct energy generation.”
Martin Tang, who shut his Chinese takeaway in Torry last month, due to rocketing energy bills, said the new PM’s speech had “no substance whatsoever”.
He added: “Sadly, I don’t see any light at the end of the tunnel.
“She is not looking after the people – the fabric of society – who can help the economy to grow.”
Mr Tang, 62, said he was “disappointed at the moment” and unlikely to reopen his takeaway after what he had heard. “I really don’t feel hopeful at all,” he added.
Shire butcher’s boss ‘encouraged’
Ken Clow, chief executive of Inverurie-based butcher Donald Russell, said he was “very encouraged” to see the relief for business in subsidised energy prices, rather than in any form of corporate tax or VAT reduction which would not help firms “on the cusp of being loss-making this year”.
“Westminster has listened to the pleas of businesses who need it most,” Mr Clow added.
But he questioned whether the measures announced would be enough and whether the review process for identifying vulnerable businesses would be robust.
“How do you demonstrate you are vulnerable,” he said, adding:” Nobody is immune to significant price volatility.”
Mike Duncan, development manager for the Federation of Small Businesses (FSB) in the north-east, said: “It’s a huge relief for local small businesses to hear confirmation they will be part of the government’s plans to help on energy.
“Many businesses across the north of Scotland have been pushed to the brink by crippling energy bills, and so it is welcome that assistance is on the way.
“However, the announcement is very high-level and sparse on detail, so our initial reaction is that we do not have enough information to judge how this will affect our local businesses.
“Today’s statement appears to have left a number of questions unanswered.”
Many businesses across the north of Scotland have been pushed to the brink by crippling energy bills.”
Mr Duncan added: “There must not be a cliff-edge in six month’s time, with the withdrawal of support to all but the most “vulnerable” businesses. The definition of which businesses fall in or out of that support will need to be looked at carefully.”
FSB Highlands and Islands development manager David Richardson, said: “The inclusion of businesses in the UK Government’s plans to help on energy costs will bring a sigh of relief to the many pushed to the brink by crippling energy bills, let alone the increases coming down the tracks towards them.
“Businesses desperately need a lifeline that will protect them, the jobs they provide and the communities they support, for all are at risk.
“We will need to see more detail added to today’s headline announcements before we can properly judge the value of what is being offered.”
Aberdeen & Grampian Chamber of Commerce chief executive Russell Borthwick welcomed “the two-year reassurance handed to families across the north-east”.
“Businesses need the same certainty,” he said, adding: “Failure to provide clarity beyond the next six months is a mistake and will provide little comfort to firms facing an onslaught of rising costs today.
“Greater intervention will undoubtedly be required before the spring to hold back a wave of insolvencies.
“Energy is just part of the jigsaw in terms of rising costs of doing businesses. The price of materials continues to soar, chronic labour shortages are hampering growth and a stable competitive tax regime is needed if we are to raise productivity and our national economic output.”
Mr Borthwick added: “While it’s a welcome start for the new prime minister, there’s plenty still to tackle in her in-tray — and we hope to see much more for business over the coming weeks.
“Struggling firms who still wear the scars of the pandemic need long-term certainty to prosper once again.”
Scottish Licensed Trade Association managing director Colin Wilkinson said: “Sadly the damage is already done.
“Today’s announcement has not gone into enough detail on what ‘equivalent support’ will mean and does not help businesses already planning to close or reduce their opening hours over the winter period.”
Conversation