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Non-domestic Energy Support
09 January 2023
Lead MP
James Cartlidge
Debate Type
Ministerial Statement
Tags
EconomyTaxationEnergyBusiness & Trade
Other Contributors: 45
At a Glance
James Cartlidge raised concerns about non-domestic energy support in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Government Statement
The Minister announced a new package of transitional support worth £5.5 billion from April 2023 to March 2024, including an energy bills discount scheme for businesses, charities and the public sector. This follows previous relief schemes that provided a total of £18 billion in support. The discounts include up to £6.97 per megawatt-hour on gas and £19.61 on electricity, benefiting typical pubs with a discount of up to £2,300 over 12 months and small retail stores getting up to £400 off their annual energy bill. Additionally, the statement highlighted targeted support for trade-intensive sectors like manufacturing, providing discounts based on price thresholds capped at £40 per megawatt-hour for gas and £89.10 for electricity. The Government aims to balance business needs with financial prudence, reducing universal support in the future while maintaining transitional assistance.
Erith and Thamesmead
Question
The Minister mentioned limited information about the promised review for targeted support measures. Can he tell us where it is, who was consulted, what were the outcomes and whether it even took place?
Minister reply
The minister did not directly address the specific question but highlighted that this transitional support scheme aims to provide certainty while balancing business needs with financial prudence.
Erith and Thamesmead
Question
What is the Government doing to ensure take-up of energy efficiency measures for small businesses, and what long-term plan do they have for securing lower bills?
Minister reply
The minister did not provide a direct answer but mentioned additional investment aimed at reducing overall energy use and emphasised that firms need to adapt and invest in energy efficiency.
Erith and Thamesmead
Question
Can the Minister confirm what businesses are eligible for targeted support, particularly regarding the domestic steel industry?
Minister reply
The minister did not provide a detailed response but reiterated that the new energy bills discount scheme includes targeted support based on price thresholds designed to benefit trade-intensive sectors.
Erith and Thamesmead
Question
What steps has the Government taken to make it possible for firms to invest in green technology?
Minister reply
The minister did not address this question directly but emphasised that transitional support aims to provide certainty and encourage adaptation while reducing universal support over time.
Erith and Thamesmead
Question
The MP asked about the status of a promised review on targeted support measures, including who was consulted and what were the outcomes. She also inquired about steps taken to ensure energy efficiency measures for small businesses and plans for long-term energy security. Questions were raised regarding specific industries such as steel producers and Wade Ceramics.
Minister reply
The Minister responded that he is making a statement based on the review, which involved consulting key stakeholders. He defended the government's support measures worth £18 billion over six months. Regarding hospitality, the minister mentioned frozen alcohol duties and increased business rate discounts. He also highlighted Britain’s progress in wind energy production and emphasised balancing fiscal prudence with supporting businesses.
Harriett Baldwin
Con
West Worcestershire
Question
The MP welcomed the announcement and asked if the Minister could encourage businesses to not pass on higher energy costs through inflation, instead promoting a quicker transition of wholesale prices to retail.
Minister reply
The minister acknowledged the importance of avoiding price inflation but noted that international trade-exposed companies face unique challenges in passing on high prices. He emphasised the government’s support for such sectors with targeted measures.
Stewart Hosie
SNP
Dundee East
Question
Happy new year, Mr Deputy Speaker. I thank the Minister for his statement and for early sight of it, although I suspect businesses will be as underwhelmed and disappointed by it as they were frustrated by the delay in making it. There is also a degree of sleight of hand... May we have an assurance that if this turns out to be not a short-term price shock but a medium-term price problem, this package and the level of the discount will be reviewed before next winter so that businesses do not fall over due to high energy costs?
Minister reply
There has been 18 months of support for non-domestic accounts for businesses. The Government announced a new long-term commitment to drive improvements in energy efficiency with an ambition to reduce final energy consumption by 15% by 2030 against 747, c. 4MC.] Perhaps that is understandable, but compared with any normal fiscal event, it remains a very significant intervention.
Robert Buckland
Con
South Swindon
Question
I welcome my hon. Friend’s statement. He will understand that many businesses face the prospect of having to pay significant up-front costs to enter into new contracts, which is a real challenge... What work will he do with Ofgem, the regulator, to ensure that such punitive contracts can be ended and businesses can operate on a much fairer basis?
Minister reply
My right hon. and learned Friend asks an excellent question. Through the review, we have heard of issues in and around the pricing and availability of non-domestic tariffs... Ofgem is launching a deeper review of the market.
Darren Jones
Lab
Bristol North West
Question
We know from the design of the domestic scheme that people in particular circumstances are not being helped as the Government perhaps intended. Will the Minister confirm that the Government will tweak the design of this policy...?
Minister reply
It is a good question. As the hon. Gentleman is the Chair of the Select Committee, I am happy to engage with him and go through some of those categories. There are important examples where we will look to see what we can do to provide assistance.
Philip Hollobone
Con
Kettering
Question
I welcome the extension of energy price support for non-domestic users... A popular local pub in Kettering had its electricity bill increase from £2,000 a month to £9,700 a month and reluctantly agreed to pay £5,700 a month with another supplier. Is that blatant profiteering? I welcome what he said about getting Ofgem involved as quickly as possible.
Minister reply
I pay tribute to my hon. Friend for being an absolute champion for his constituency... We will look at whether there are abuses and what can be done about it.
Kerry McCarthy
Lab
Bristol East
Question
The Christmas period should be a boom time for hospitality companies; sadly, in Bristol we saw quite a number go under, and energy bills were a huge reason for that... Will the Minister ensure that, with packages going forward, everybody is in the know, the details are communicated, and there is enforcement so that people get the help they are entitled to?
Minister reply
The hon. Lady asks a pertinent question... Payments should be automatic.
Andrew Percy
Con
Brigg and Goole
Question
I take no lectures from the Opposition on support for the steel industry: not only did they preside over the loss of thousands of steel jobs, but they have supported policies that have put costs on our industry... Will he continue the engagement taking place at a senior level between the steel industry and Government to look at what other support can continue into the future?
Minister reply
My hon. Friend is a stalwart champion of the steel sector, which I know is so important to him and his constituents. On the additional discounted support for energy and trade-intensive industries that we have announced today, international comparators were a factor in considering the greater generosity of that support.
Nia Griffith
Lab
Llanelli
Question
In the long term, we need to reduce the reliance of energy-intensive industries such as steel on fossil fuels, and for that we need further investment in innovation... Will the Minister tell me what the Government’s policy is and when I can expect that letter?
Minister reply
I am not aware of what has happened to the letter or where it is, but I am more than happy to look into that as a matter of urgency and to ask my officials to chase it up. We will write to the hon. Lady as soon as we can.
Maldon
Question
While I agree with my hon. Friend that support cannot continue indefinitely, I welcome his recognition that high energy users will continue to require special help. Will that support cover agricultural businesses that are high energy users such as Dengie Crops in my constituency, which uses gas to dry crops to produce animal feed?
Minister reply
My right hon. Friend asks an important question. Like him, as an MP representing an East Anglian arable constituency, I am aware of the importance of such businesses to the wider agricultural sector. As I said to the hon. Member for Bristol East (Kerry McCarthy), we will be publishing a list on gov.uk showing those energy and trade-intensive industries that are eligible for the higher level of support; I refer him to that. I am also happy to write to him to confirm it exactly, because within one sector there will be a range of different types of industry that may qualify.
Sarah Olney
Lib Dem
Richmond Park
Question
At the end of October, I had a meeting with a number of publicans in my constituency. They were looking forward to strong demand during the World cup and over Christmas, but they were deeply, deeply concerned about what would happen between January and March in particular. They were desperate for clarity on support for fuel bills. The fuel bills issue is the biggest issue they are experiencing, although it sits alongside other pressures such as staff shortages, supply chains and so on. What consultation did the Treasury have with UKHospitality and other bodies before making today’s statement and the new policy on fuel bills? What discussions did it have with UKHospitality about other potential forms of support for the sector as it comes through the crucial first quarter of 2023, which will be so challenging?
Minister reply
All I can say is that I suspect pubs did get a boost from the World cup. I wish it had run for longer, but I am afraid that is beyond my control. We very much enjoyed the tournament none the less. I understand the challenges facing hospitality. In my statement on our last but one sitting day of 2022, I announced the six-month extension of the freeze on alcohol duty. This has been a particularly challenging time for pubs. As the hon. Lady knows, we are in the middle of the £18 billion EBRS support, which has helped pubs in particular. We have been clear that we have continued what is effectively a universal scheme, notwithstanding the specific extra support for the energy and trade-intensive sectors. UKHospitality has been included in that consultation. That has happened at an official level, but also through the Chancellor and me, with the voluntary sector and others. We continue to engage very closely with UKHospitality through our Department, the Department for Business, Energy and Industrial Strategy and others on those matters.
Wendy Morton
Con
Aldridge-Brownhills
Question
I, too, welcome the Government’s announcement. It is really important that we avoid the cliff edge. Speaking to businesses across Aldridge-Brownhills, whether they are part of the energy-intensive sector, retailers, hospitality or even funeral directors, they are all deeply impacted by the energy costs. Can the Minister provide any more clarity or confirmation on whether all business sectors will be covered by today’s policy announcement?
Minister reply
My right hon. Friend makes a very good point about how broad the impact is of rising energy bills. She used the phrase “cliff edge”. That is precisely why we have continued with a universal scheme. Yes, I am happy to confirm that there will be support for every single business, charity and institute in our public sector, but there will be additional support if they are in the energy and trade-intensive sector. The reason for that is the exposure to internationally competitive pressures and how much harder it is for them to pass on those prices. We recognise the energy challenges for small and medium-sized enterprises in every single sector. We are doing what we can, but balancing that against the need for fiscal prudence.
Nick Smith
Lab
Blaenau Gwent and Rhymney
Question
On possibly tweaking the scheme, last week I visited a housing scheme for older people in Blaenau, where constituents with private pensions were complaining of increased energy costs of 400%, or £50 a week, just for heating the common social areas. The housing association complained that none of the Government’s energy schemes is of help to the organisation, so it had to pass on the costs. Will the Minister please meet me to hear those important concerns?
Minister reply
The hon. Gentleman raises a very important point. I would have to know the exact details, but, yes, I am more than happy to meet him. He will be aware that the care home could benefit from EBRS, which will become the energy bills discount scheme after March, but I stress that there are 900,000 in England, Scotland and Wales without a direct relationship with an energy supplier, such as care home and park home residents. This month they will be able to apply online for £400 of non-repayable help with their fuel bills.
Greg Smith
Con
Mid Buckinghamshire
Question
I very much welcome the package of support announced this afternoon and the enormity of the total support package, but may I push my hon. Friend a little on what is energy intensive? Padbury Meats, a butcher in my constituency, wrote to me over the weekend. It is a healthy business with a huge gross income per annum, it employs six staff and has no borrowings. Thanks to careful decisions, it managed to buy a freehold and therefore pays no rent, but it has seen a fourfold increase in its energy bills since the invasion of Ukraine and is not making a profit. The owner is personally subsidising the business through their own savings, which is not sustainable. Instead of looking at specific energy-intensive industries, will he look at the proportionality of energy bills to total revenue to determine which businesses, such as butchers who have huge fridges and walk-in freezers, need support?
Minister reply
My hon. Friend makes an important point. The first part of my answer may disappoint him, but I want to be clear. The additional support, particularly for manufacturing, is not just about energy intensity but trade intensity. There are two measures that determine if sectors are entitled to support: whether they are above the 80th percentile for energy intensity and the 60th percentile for trade intensity. So, it may be that the sector does not fit in that category. But that is why—I appreciate the support is less generous, but it is still significant—alongside the additional support for the intensive users, there will still be a universal scheme offering a discount from April this year to March next year.
Question
A much-loved institution in my constituency, Gorgie city farm, is facing closure. Its energy bills for 18 months were previously £17,000, but its last bill for just eight months was £27,000—an increase of over 300%. Can the Minister not see that what he is offering is a drop in the ocean for charities like Gorgie city farm? How does he expect fantastic community institutions, such as the city farm in my constituency, to survive crippling costs when what is on offer is such a drastically reduced package?
Minister reply
I am grateful to the hon. and learned Lady for mentioning the charity in her constituency. As I said, I appreciate that the energy increase has been a challenge for every type of SME, charity and institution up and down the country. I am sorry to hear about the challenges for Gorgie city farm, which I have not had the pleasure of visiting but it sounds fascinating. Charities have shown huge resilience over the past two years and will continue to receive support with their energy bills from the latest iteration of the discount scheme. I emphasise that there is wider support to help them with their costs, including a reduction in VAT from 20% to 5% and an exclusion from the main rates of the climate change levy on some of the energy they use. The key point is that we are announcing a scheme that is still universal in nature and still includes charities. It is not as generous as before, but when we engaged with stakeholders about the £18 billion six-month scheme, what was interesting was the number of them who remarked that they had not expected that scheme to continue at that level of generosity. They could see the issue about sustainability for the taxpayer, which we all have to understand and address. It is in all our interests, and in the interests of every single business and charity, that this country has sustainable public finances.
Desmond Swayne
Con
New Forest West
Question
Has any analysis been made available to Ministers regarding the movements in wholesale prices and the tariffs actually being offered to customers going forward?
Minister reply
It is very timely that my right hon. Friend raises that point. He will have heard me mention to the former Lord Chancellor, my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), that the Chancellor has today written to Ofgem to encourage it to update him as soon as possible and as a matter of urgency about the review of the non-domestic market, because we are hearing about many issues with it. A key point I will be feeding back is that colleagues on all sides of the House have experienced cases in their constituencies relating to deposits being asked for, deals being rejected and what will happen at the end of fixed rates. There is clearly work to be done and that is why the Chancellor has written as he has. I will ensure the letter is published on gov.uk along with the other documents.
Stephen Doughty
Lab Co-op
Cardiff South and Penarth
Question
Businesses small and large in my constituency have raised serious concerns about the energy bills support scheme. I have residents in an apartment block who have not received any support yet, falling into a specific category. When will the website be open for applications? Will they receive backpay? Why do they get £400 instead of £600 like others?
Minister reply
I understand the hon. Gentleman's concerns about residents in apartment blocks who have not received support yet due to a specific category issue. A £600 payment is going out in Northern Ireland, but here it will be £400 due to lower usage of heating oil except in rural areas. The website for applications should be open this month and I encourage the hon. Gentleman to write with case details.
Question
I welcome additional business support, but we must focus on energy efficiency to reduce costs and mitigate climate change.
Minister reply
My right hon. Friend is correct; long-term solutions involve increasing domestic energy security through renewables and North sea transition. Businesses can also benefit from the £315 million industrial energy transformation fund, the £450 million boiler upgrade scheme, and several capital allowances for energy efficiency investments.
Dwyfor Meirionnydd
Question
Siôn Edwards has had to close his farm shop due to high electricity bills. He needs support for investment in energy efficiency and renewable measures such as solar panels. Will the Minister meet me to discuss FSB's 'help to green' vouchers?
Minister reply
That sounds like an interesting idea and I would be happy to meet the right hon. Lady to further discuss it.
Question
Welcoming measures for energy-intensive industries, can we ensure that our support is in line with international standards so that domestic steel industry has a level playing field?
Minister reply
My hon. Friend's point about duration and international competitiveness is well-taken. The £18 billion scheme now extends to 12 months, which provides much-needed certainty for the industry.
Cat Smith
Lab
Lancaster and Wyre
Question
Post offices are vital to economic vibrancy but operate on tight turnovers. Will post offices continue to be eligible for the same level of support?
Minister reply
Sub-post offices will receive less generous support as part of being fiscally responsible. However, it is still significant and includes those sectors exposed to international competition.
Question
Businesses have welcomed the energy bill relief scheme but need certainty for planning purposes. Could he say more about where businesses can find definitions of 'in scope' to identify eligibility?
Minister reply
My hon. Friend is right, and it should be live on gov.uk today. I will tweet the exact address in due course.
Justin Madders
Lab
Ellesmere Port and Bromborough
Question
Local businesses needed clarity before Christmas but did not get it until now. How can we ensure that costs are not passed on to leaseholders?
Minister reply
We are aware of cases where domestic customers receive non-domestic metre discounts via the EBRS scheme. We are developing options to ensure they receive support in line with other domestic users after April.
Simon Hoare
Con
North Dorset
Question
Micro and small businesses, often off-grid using oil, need assurance that they will continue to be supported.
Minister reply
As announced at the autumn statement, we provide £150 support for UK non-domestic consumers off the gas grid who use alternative fuels. We are monitoring further support needs.
Barbara Keeley
Lab
Worsley and Eccles South
Question
Many theatres, galleries and museums are in energy-inefficient buildings—listed buildings with high energy costs. Theatre and orchestra tax reliefs are already planned to be cut by 15%. Can the Minister tell me what the Government are doing to reassure our critical arts organisations and protect them from this storm of financial challenges?
Minister reply
I assure the hon. Lady that those organisations would at least qualify for the universal scheme. From 1 April until 31 March next year, all eligible non-domestic customers will see a unit discount of up to £6.97 per megawatt hour applied to their gas bills and a unit discount of up to £19.61 to their electricity bills.
Jack Brereton
Con
Stoke-on-Trent South
Question
Energy-intensive industries, particularly the ceramics industry in Stoke-on-Trent, have been most exposed to global energy price shocks. Can the Minister reassure me that all ceramics producers in Stoke-on-Trent will receive the additional support that they need?
Minister reply
My hon. Friend is a champion for the ceramics sector, and I know how important it is to the Potteries and his constituency. If he looks at SIC code 23, he will see a range of ceramics industries covered.
Sammy Wilson
DUP
East Antrim
Question
I welcome this package but remain concerned that even if energy prices stabilise, there will be continued upward pressure on businesses’ energy bills for the foreseeable future. Will these measures apply to Northern Ireland automatically? Will food processing companies also receive support?
Minister reply
Yes, food processors would be included and support will be given to UK non-domestic customers including those in Northern Ireland.
Jonathan Gullis
Lab
Stoke-on-Trent North
Question
The statement will be welcomed by many ceramics manufacturers but they also want to ensure that they are all eligible. Will the Minister meet me, other Stoke-on-Trent Members of Parliament and Rob Flello, the chief executive of the British Ceramic Confederation, to look at those examples?
Minister reply
Like my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton), my hon. Friend is a champion for that incredibly important industry in his constituency. I entirely understand that there has been great anxiety about the prevailing level of energy costs, and we hope that this package will provide vital help.
Steve McCabe
Lab
Birmingham Selly Oak
Question
Will the Ofgem inquiry consider high charges for the delivery of energy to business premises which can amount to double the wholesale price? Does the Minister agree that any inquiry will need to be swift, with immediate action?
Minister reply
The hon. Gentleman is right about the need to be swift. I have responded to a number of Members by referring to the letter to Ofgem that the Chancellor was sending today, asking it to produce an urgent update on the review of the non-domestic energy market.
Caroline Lucas
Green
Brighton, Pavilion
Question
Research from the Federation of Small Businesses suggests that one in four small businesses are expected to close, downsize or radically change their business models when the Government reduce energy support. Will the Minister look at other ways of supporting small businesses with the multiple challenges they face?
Minister reply
I understand why colleagues are concerned and I have been clear that this remains generous support but is not as generous as it might be. Significant funds are available to support efficiency.
Mike Amesbury
Lab
Warrington South
Question
What would the Minister say to Mr Uppall, who runs a vital service—a post office—in Hartford, and Alison, the landlady of the Bulls Head in Frodsham, about his rationale and that of the Government in reducing vital support at this particular time?
Minister reply
The hon. Gentleman is absolutely right to raise these points. We have to take a balanced approach considering what support we can provide as well as the cost to the Exchequer.
Chi Onwurah
Lab
Newcastle upon Tyne Central and West
Question
On Friday, the MP visited Gills convenience store where they learned that spiralling energy costs are a significant threat to businesses. The minister's scheme is limited to £400 support for businesses. Will he agree that it is the Government's responsibility to deliver a sustainable and secure energy market?
Minister reply
The Ofgem review aims to ensure an effective non-domestic market for businesses. While rising energy prices impact businesses, the leader of the Labour party previously stated the end of 'big Government chequebook'. The scheme provides significant support with over 60% of £5.5 billion allocated for energy and trade-intensive industries.
Stephen Kinnock
Lab
Aberafan Maesteg
Question
The German government guarantees their steel industry an electricity price, whereas the UK's scheme leaves steel producers paying 63% more than their German counterparts. Why is the Government letting down the steel industry?
Minister reply
This support remains generous for energy and trade-intensive industries in the UK; about £5.5 billion allocated will be used to support these sectors, including major manufacturing such as steel.
Question
Does a maximum of £191 per month provide sufficient support for businesses facing energy costs increases up to 400% and 500%, with monthly bills ranging from £5,000 to £15,000?
Minister reply
The hospitality sector is supported through the current six-month scheme of £18 billion. The Government's support includes reductions in alcohol duty to help pub businesses.
Question
Energy policy is normally devolved in Northern Ireland, but given differences in fuel use and profiles, will a restored Executive have the opportunity to shape policy to suit local needs?
Minister reply
The £600 payment, combining £400 support for households and an alternative fuel payment, is being provided. The same support will be applied across England, Scotland, Wales, and Northern Ireland.
Fleur Anderson
Lab
Putney
Question
The delay in the statement has left businesses unable to continue operating due to high energy costs; what impact has been assessed on post offices and will they be included in the cut-back scheme after March?
Minister reply
Businesses have benefited from current support until March. The new scheme provides 12 months of security, confirming that sub-post offices are included.
Question
Many businesses are locked into expensive contracts; what will the Minister do about these hopelessly expensive contracts and energy prices?
Minister reply
The scheme continues to support companies with higher tariffs when they fix while prices were higher. It provides 12 months of security, though it is not as generous due to cost considerations.
Wendy Chamberlain
Lib Dem
North East Fife
Question
Since the autumn statement, a business in her constituency has written four times regarding energy support without response. Will the review be published and who is the ultimate arbiter for disagreements?
Minister reply
If there was no response to the business's correspondence with the Department, she can forward it so he can look into it.
Question
The energy profits levy measures are bringing in £56 billion, yet businesses struggle; how many small businesses and jobs might be lost under fiscal prudence?
Minister reply
The money from the energy profits levy supports the UK Treasury to help businesses across England, Scotland, Wales, and Northern Ireland. The Union's strength benefits all parts.
Dave Doogan
SNP
Angus and Perthshire Glens
Question
Manufacturing is the lifeblood of any economy, particularly for small and medium-sized enterprises like ScanStone in my constituency which manufactures potato systems. Despite existing support, ScanStone faces significant challenges due to the energy crisis and reduced support. Can you explain how I should advise them on navigating these difficulties?
Minister reply
The hon. Gentleman's focus on reality is noted; however, it must be clarified that prior consultation on differential alcohol duties was ongoing for months before his question. Regarding ScanStone, I recommend checking gov.uk to see if the company qualifies under the Energy Intensive Industries Support Scheme (EIIS), which remains generous and could provide significant assistance.
Shadow Comment
Abena Oppong-Asare
Shadow Comment
The Shadow Minister criticised the Government for lacking clarity and certainty for businesses facing high energy bills. She questioned the absence of a promised review, which was to examine targeted support measures. The Labour party pointed out the negative impact on industries due to delayed announcements and changing plans, highlighting closures such as Wade Ceramics in Stoke-on-Trent during delays over energy support. She emphasised the need for long-term investment in green technology and an industrial strategy to boost business confidence. The Shadow Minister concluded by presenting a 'green prosperity plan' from Labour that focuses on addressing the root causes of the energy crisis.
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