Energy bills relief welcome – but longer-term help needed

London, UK: Logistics UK and the RHA have welcomed the government’s Energy Bill Relief Scheme but have warned that further help will be needed beyond six months.

The scheme will fix wholesale gas and electricity prices for firms for six months from 1 October. It is understood the scheme will be reviewed after three months with an option to extend support for “vulnerable businesses” – but it is not known what sectors will be included in this category. Businesses and professional bodies will be able to engage in the review.

The government says it has set a Supported Wholesale Price – expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices anticipated this winter – which is a discounted price per unit of gas and electricity.

This is equivalent to the wholesale element of the Energy Price Guarantee for households.. Those rates will be the base cost, to which other add-ons, such as standing charges will be added by suppliers.

Richard Smith, RHA managing director, said: “We welcome this measure which gives much-needed help to road transport businesses – the majority of which operate on low margins.

“As this support is in place for six months and prices are likely to remain high for many months, the industry will need support for a longer period to protect our supply chains.

“The announcement of a review on future support beyond six months is much needed, and we will be engaging closely with Government to ensure support is extended for the industry.”

Kate Jennings, director of policy at Logistics UK, said: “Figures from the latest edition of Logistics UK’s Manager’s Guide to Distribution Costs show that total vehicle operating costs have increased by 16.7% in the six months to 1 July 2022, as fuel, insurance premiums, business overheads and maintenance costs – such as tyres – have all increased.

“With operators also facing further costs as they look to decarbonise their fleets – and with many road operators transitioning to electric vehicles – Logistics UK is keen to work with government to explore what further support will be needed beyond the six-month period.”

British Chambers of Commerce director general Shevaun Haviland said:
“This package is significant and will ease the cost pressures that have been piling up on businesses.   It will allow many firms that were facing closure, or having to lay off staff or reduce output, to keep going through the winter.

“But the exact level of support will vary greatly from business to business depending on the detail of its contract, so some will inevitably do better than others. We now need action to get this saving passed onto business as soon as possible.

“Some businesses will still struggle to meet their bills despite this government intervention, the Chancellor must prioritise those firms in his mini-budget on Friday.”

Prime Minister Liz Truss said: “I understand the huge pressure businesses, charities and public sector organisations are facing with their energy bills, which is why we are taking immediate action to support them over the winter and protect jobs and livelihoods.

“As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind.”

The UK Warehouse Association said in a Tweet today: “UKWA welcomes today’s announcement of an energy bill relief scheme to cut prices for non-domestic customers such as warehouses. However, costs are still likely to be higher than a year ago and the easement is only guaranteed for 6-mths, offering small comfort in the longer term.”

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