An energy industry trade body has reportedly written a draft letter urging the next prime minister to commit taxpayers’ money to help struggling businesses pay their energy bills. The letter from Energy UK suggests a range of measures to support businesses, including deficit funding for suppliers, scrapping VAT from bills, and exemptions from business rates, according to the i.
The publication reports that Energy UK also calls for longer-term measures as it warns of gas prices staying high “well into 2023 and 2024”, for example scrapping green levies for businesses. The industry association suggests a deficit tariff fund for Government-backed loans to energy suppliers to help pay costs and keep bills low.
It is understood that Energy UK will send the letter to the chancellor appointed by the new prime minister next week, although it is subject to change. An Energy UK spokesperson told the PA news agency it has no comment as it is a draft letter that has not been finalised or sent. The letter is to be published after it is sent.
Meanwhile, Chancellor Nadhim Zahawi has reportedly drawn up plans for multimillion-pound tax cuts to help businesses facing bankruptcy, according to The Times. These reportedly include targeted reductions in VAT and business rates to help the retail and hospitality sectors.
It comes after leaked Treasury estimates showed energy firms could make up to £170 billion in excess profits over the next two years, according to media reports earlier this week. In response to the reported letter, Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “While we need emergency support to get through this winter, we also need a long-term plan to cure the country of fuel poverty.
“Reform of the failed energy market, investment in improved energy efficiency of the nation’s homes and a move away from expensive fossil fuels towards home-grown renewables are what we need to see. Whilst energy firms can play a huge role in helping households, the concern about plans put forward by these companies is that they sustain the status quo into the long-term, rather than look at how we fix Britain’s broken energy system and help people out of fuel poverty.”
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