Food industry trade bodies have welcomed the UK government’s new energy price cap for businesses but add that the support may not go far enough.
According to the government’s energy price cap policy, the typical UK household will save an average of £1,000 a year on their energy bills, under a new two-year Energy Price Guarantee. Businesses and public sector organisations will see equivalent support over the winter.
The statement said: “As businesses have not benefited from an energy price cap and are not always able to fix their energy price through fixed deals, many are reporting projected increases in energy costs of more than 500%.
“A new scheme for businesses and other non-domestic energy users (including charities and public sector organisations like schools) will offer equivalent support as is being provided for consumers. This will protect them from soaring energy costs and provide them with the certainty they need to plan their business.”
The scheme is set to run for six months, after which the government said it will provide “ongoing, focused support for vulnerable industries.” It added that there will be a review in three months’ time to consider where this support should be targeted.
More security for businesses and retailers
Scottish Bakers said that it would make the “appropriate representations” to the government on behalf of the bakery trade “to ensure the government understands its high energy demands.”
President Ian McGhee and chief executive Alasdair Smith are scheduled to meet with the Secretary of State for Scotland shortly to press for longer term, financial support.
Commenting on the new measures, Smith said: “We welcome the government’s intervention to provide more certainty and to help halt the spiralling costs we were facing; though it must be noted that this does mean heavy energy users like bakeries are already paying more than double for the energy than before.
“It’s also good for retail as households will have a little more certainty and security over their household bills, though again it’s still a huge increase burden most household are already facing.”
He added that Scottish Bakers “remains concerned” that the cap for businesses is in place for six months compared to households who will see a cap of two years. However, the promise of a review to look at longer-term support for business, he said, is welcome.
Support still needed
NFU Scotland president Martin Kennedy said: “Under the proposals, energy prices will still be going up, but the package announced it will limit that increase for six months with a review after three.”
Kennedy said that agri-food businesses “must be considered as ‘vulnerable’” in the three-month review of the announced package and these businesses should have an extended energy cost cap beyond the proposed six months as they are a key part of the Critical National Infrastructure (CNI).”
He added: “It is in the public’s interest that their continued operation to put food on the table be assisted by capping energy costs. That would also help to dampen further food price inflation and be of genuine benefit to our hard-pressed consumers.”
Pressures remain
National Farmers’ Union (NFU) Scotland have released figures from its survey of over 110 food and farming businesses on details of their energy rates, showing energy supplied to a business will have “no benefit” from “previous and future domestic price caps.”
Nine out of ten (89%) who replied to the survey were previously paying less than 20p per kWh for their electricity but are now facing renewal rates up to 92p per kWh. For some businesses, their bills have increased by tens of thousands of pounds, according to the NFU.
