Business support urged ahead of energy price cap announcement

The UK and Scottish governments have been urged to take action to support businesses as Ofgem prepares to announce a new energy price cap.

An action plan from the Scottish Chambers of Commerce (SCC) network proposes both reserved and devolved steps that can be taken to tackle the ongoing cost-of-living crisis and ensure firms avoid “unsustainable rises”.

The network is calling upon ministers at Holyrood to provide a business relief package at a similar level of support to that given during the Covid-19 pandemic, aligned with support offered to communities and households, and to ensure the non-domestic rates revaluation goes ahead as planned next year.

It is also urging for a moratorium to be placed on all policy measures which increase business costs for the remainder of the parliament and put a pause on regulations and new taxes such as the workplace parking levy.

Meanwhile, Westminster is being asked to implement a temporary cut in VAT bills to 5%, introduce an SME energy price cap and offer Covid-style support in the form of an emergency energy grant for the businesses most at risk from the crisis.

The SCC is also recommending that national insurance contributions are temporarily reversed in order to put money back into the pockets of companies and their owners, and that the Shortage Occupation List is reviewed and reformed to help in filling talent shortages.

SCC chief executive Dr Liz Cameron said: “Since the start of 2021, businesses could see this crisis coming and have been consistently telling us that they are facing unsustainable rises in costs.

“The impact of these challenges on businesses, consumers and our communities must be tackled with immediate action.

“The scale of the crisis has reached a tipping point and with so many on the brink, we simply cannot afford any more inaction.”

It comes as Citizens Advice Scotland warned people will be awaiting the new energy price cap announcement “with a feeling of dread in the pit of their stomach”.

The maximum amount domestic customers can be charged for their energy and gas supplies is expected to rise to more than £3,500 from October.

Citizens Advice Scotland chief executive Derek Mitchell said: “CABs are on the front line of this cost-of-living crisis and what they are seeing is increasing amounts of people hanging on by their fingertips. They cannot afford another huge increase in bills.

“The Citizens Advice network is already seeing increased demand for, and a direct link between, food insecurity advice and energy advice. It’s the summer time, what are people supposed to do when temperatures drop but bills keep rising? People will freeze or starve without urgent help.

“We need to see a pandemic-level response from government. That means targeted support for the most vulnerable people and for advice services like CABs.”