The Government recently announced its Energy Strategy, in which is plans to increase UK energy independence and manage rising prices. Under the new plans, low carbon could become a source of up to 95% of the UK’s electricity.
The plan includes
Support with energy bills
The Government has unveiled a £9.1 billion support package, including a £150 non repayable council tax rebate for most households which is due to be paid from April 2022 onwards
The Energy Bills Support Scheme will go further to see households in the UK receive a £200 deduction in energy bills from October 2022. This is repayable, through energy bills, over the next five years, helping smooth over the shock increase in prices from April 2022. Furthermore, to support vulnerable households with food and utility bills, the government will invest £500 million in a Household Support Fund, which will be distributed by local authorities.
Help for Businesses
The government has recognised that the industrial energy prices for the UK are much higher than those in other countries and as a result, is extending the Energy Intensive Industries (EII) Compensation Scheme for a further three years. The aid intensity will be increased up to 100%
Reactions to the Strategy
Business groups, including the Confederation of British Industry (CBI), the British Chambers of Commerce (BCC) and the Trades Union Congress (TUC) reacted to the publication of the Energy Strategy.
The CBI stated that the Strategy ‘sets an ambitious bar for a more resilient, low carbon energy system for the future’. Rain Newton-Smith, Chief Economist at the CBI, said: ‘Bold words must now be matched by bold actions from the government. The proof will be in the Strategy’s delivery, in partnership between business and government. Business believes greater energy independence must go hand-in-hand with delivering a net-zero, higher growth economy.’
The BCC labelled the Strategy as a ‘missed opportunity’. Alex Veitch, Director of Policy and Public Affairs at the BCC, said: ‘The transition to the cheaper, cleaner energy sources of tomorrow is vital, however prices are soaring today, and businesses need support now. This strategy is a missed opportunity to provide that which is why we are urging the government to introduce a temporary SME price cap, expansion of the energy bills rebate scheme to include SMEs and a six-month extension to the Recovery Loan Scheme.’
The TUC said that the Strategy ‘fails to rise to the challenge of the climate emergency’. Frances O’Grady, General Secretary of the TUC, said: ‘It does little to reassure the millions of workers facing big falls in their living standards due to soaring energy costs.
‘A mass home insulation programme would slash bills and create over 200,000 jobs. But it is entirely missing from the strategy.’
For advice on how rising costs can affect your business and how to prepare, contact a member of our team at firstname.lastname@example.org. SF Chartered Certified Accountants have a team of experienced Chartered Accountants who advise according to your circumstances. We work with local businesses in the West Midlands and across the country.