Small firms have said the Prime Minister’s energy price pledge for businesses could be a “lifeline” but warned they cannot remain in “limbo” for the next three months.
It comes after warnings earlier this week that tens of thousands of UK businesses could be forced to fold without help to address spiralling energy bills.
Prime Minister Liz Truss announced plans to freeze energy bills for households at no more than £2,500 on Thursday.
She added that businesses, which are not covered by an energy price cap, will receive a six-month scheme of “equivalent” support.
The Government has held back on further details about support for firms and said the Business Secretary, Jacob Rees-Mogg, will first speak to industries during a three-month review process.
Small business owners and industry leaders said the action was welcomed but said more information is needed quickly for them to plan their future amid record gas prices.
Craig Bunting, owner of Derby-based coffee shop Bear, said urgent action is needed for hospitality firms.
“Whilst the energy cap is incredibly important, hospitality businesses cannot wait for three months in limbo,” he said.
“Decisive action on 10% VAT and zero business rates would immediately stop many independent hospitality businesses from closing.”
The director of a micropub in Cheltenham also labelled Ms Truss’s plan to help businesses as “vague”.
Paul Cook, 50, who is one of the directors of the Angry Parrot pub, told the PA news agency that he was left with many questions following her announcement in parliament.
“How much will their bills increase by? Will they still increase? Will it still be silly money?” he asked.
“It’s very vague, it’s only for six months. What happens after six months when it is the winter and people are cutting back because their bills have gone up significantly?
“It’s not a win-win at all, it just leaves businesses in a bit of a limbo really because we just don’t know what’s going to happen.”
“We work on much longer cycles than six months to make decisions on hiring, on investment… and a six-month period of just waiting is not going to help anybody.
He added that he is most concerned about consumer spending over the next six months as the business cannot “survive” without customers and that he hoped for “some sort of return to VAT rates that were in existence before the Covid crisis”.
Martin McTague, national chair at the Federation of Small Businesses (FSB), said: “It’s a huge relief for millions of small businesses to hear confirmation they will be part of the Government’s plans to help on energy.
“Many have been pushed to the brink by crippling energy bills, and so it is welcome that help is on the way. Done right, this will be a lifeline – protecting jobs, communities and future economic recovery.
“However, the announcement is very high-level and sparse on detail so we will be working with the new Government to clarify what happens next.
“Small businesses’ instant reaction is that this is not enough information, yet, for them to plan.”