Companies in Scotland claim they are being kept in the dark about the assistance available for skyrocketing energy costs.
The usual household bill cap will be £2,500 for two years, according to Prime Minister Liz Truss, with “similar help” for enterprises.
Scottish Engineering, a trade group, claimed that it was still unclear what this meant.
It urged UK ministers to provide clarification to prevent closures and cautioned that many businesses were already dealing with severe energy rates.
“It’s great to have a general statement, but we need details like how it’s going to function, eligibility, and any unique restrictions,” Scottish Engineering CEO Paul Sheerin said. Will some industries receive more attention than others?
“Companies need all of the information to assess their ability to survive since they are so concerned about the costs of industrial energy.”
According to information obtained by BBC News, when prices increase on October 1st, there is likely to be support for struggling firms.
With the actual mechanism and quantity of support not being finalized until November, this assistance could, however, be retroactive.
Even strong businesses are being driven to the verge of failure, according to Scottish Engineering.
Mr. Sheerin continued “One of our members’ energy costs increased from £15,000 to £80,000 per month. At that point, its future is in jeopardy.
“Even though their order book is fully booked until the middle of 2023, they have had to discuss voluntary liquidation with their accountants.
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‘claw back costs
Many businesses sign up for fixed arrangements that cover their energy expenditures for one to three years, but some choose to wait until their suppliers modify their fees.
Firms pay the market rate unless they have negotiated a different rate because there is no price cap for them.
On October 1st, it’s anticipated that nearly a third will see yet another significant increase.
Average household expenses will be limited by the government for two years, while the company support package will only last for six months, with an opportunity to extend support for “vulnerable” businesses.
This does not, in the opinion of some business owners, go far enough.
Many businesses were still recovering from the effects of the shutdown, according to David Nicolson, head of hair salon chain Rainbow Room International, therefore government assistance needed to be generous.
“I think a year of support, together with a cut in VAT, would make a difference,” he remarked.
We need to be able to recover our costs without passing them forward to customers because our suppliers have raised their pricing.
Knowing there was support, according to Mr. Nicolson, would make their business decisions “far Clawbackeasier.”
Added him: “Recovery is still a ways off. Since many of our clients now work from home and spend less time in the city center, we lost 60% of our business. We must be able to swap that out.
“Nobody knows the solutions. If you speak to other salon owners and business owners, you will find that we are all in the same situation. The increases in energy prices seem so absurd.
“There is no way that any corporation could continue to do this in the long run if the economy were to fall into recession. The winter may turn out to be very lengthy and dismal.”
Business leaders warn that the impact on the economy will be greater the longer the UK government delays in providing information about help for enterprises.
James McMorrine, managing director of Carron Bathrooms in Falkirk, claimed that all of the raw materials required in his production were becoming more and more expensive as a result of his suppliers’ increased expenses.
We’re fortunate, he continued, because we have a tied-in energy arrangement for at least 12 to 24 months.
“To cure and finish our baths, we are also investing in new robotic systems, which will ultimately save energy, but the effect is already being felt in the price of our supplies.
“Energy has an impact on every component that we put in, and
Suppliers now say there could be an ‘energy surcharge’ in contracts we sign. Some of these costs could be passed on to customers, some we can’t.”
Following the death of Queen Elizabeth II last week, the UK Department for Business, Energy, and Industrial Strategy said meetings would continue and the business of government would go on during the official mourning period.
It said an announcement would be made “in due course” on how a package of energy support for businesses would work.
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