Energy - more details needed, says Chamber

Businesses in Greater Birmingham have welcomed the Prime Minister's moves to tackle the energy crisis but warned: “We are not out of the woods yet. ”

And Greater Birmingham Chambers of Commerce (GBCC) said businesses urgently needed to see the detail on what the energy price guarantee will look like in practice.

Liz Truss announced yesterday that businesses will have their energy costs capped at the same price per unit that households will pay under the government's new plans, but only for six months.

This will be reviewed after three months and may be extended for certain industries and vulnerable businesses.

A typical UK household will now pay no more than £2,500 a year on their energy bill for the next two years from 1 October.

This will be achieved through a new Energy Price Guarantee which limits the price suppliers can charge customers for units of gas.

Henrietta Brealey (pictured), chief executive of the GBCC, said: “The Prime Minister has committed to taking substantial action to tackle the completely unsustainable increases in energy prices and that is a very welcome step.

“Now businesses urgently need to see the detail on what the energy price guarantee will look like in practice.

“Clarity on the unit price cost of energy that will be used to set the cap for gas and electricity will be essential. The fact that the initial plan lasts only six months will present uncertainty for those businesses that are looking to renegotiate contracts for the next 12 months.

“Let 's also not forget that beyond soaring energy prices, businesses are suffering from wider cost increases and staff shortages.

"Yesterday, we wrote to the Prime Minister to outline the additional support organisations will need to navigate this challenging period. ”

GBCC head of policy Raj Kandola said: “It 's pleasing to see the Government has acted decisively in a move which will hopefully boost business confidence in the short term.

“In theory, the price cap will help to limit inflation over the coming months and lessen the expected economic downturn.

“However, in the longer term, it 's likely that the Bank of England will respond with interest rate hikes following fiscal intervention of this scale.

“Within this context, the need to minimise business costs becomes even more important as it will free up cash for businesses to invest in their people and products and allow them plan ahead with more confidence going into next year.

“It 's clear we're not out of the woods yet - reversing the recent increases to National Insurance, continued reform of the business rates system and offering temporary VAT cuts for hospitality firms will offer a much needed boost to struggling businesses. ”