UK Government support for companies struggling with energy bills may not arrive until November – raising fears that this may be too late for many firms.

More details of the business-support scheme are expected next week.

A government spokesperson also told the BBC that the help would be backdated, and cover the period from October 1.

Last week Prime Minister Liz Truss said firms would get "equivalent support" to the help that was announced for households, whose bills would be capped at £2,500 for two years.

But companies are still in the dark as to what that actually means for them, including how much support they will get.

A government spokesperson said: "We will confirm further details of the business-support scheme next week. The scheme will support businesses with their October energy bills, including through backdating if necessary."

A government source added that the precise mechanism and amount of support may not be finalised till November.

Time-limited support

The support for firms is going to be time-limited to six months, with an option to extend support for "vulnerable businesses" - but there has been little indication so far of what that means.

Trade body Scottish Engineering has urged UK ministers to give clarity on the business-support scheme to help stave off closures.

Paul Sheerin, chief executive of Scottish Engineering Sheerin, said to the BBC: "It's great to have a broad statement, but we need details like how it's going to work, eligibility and any special conditions. Will some parts of industry be given priority?

"All this is required by companies who're desperately worried about their industrial energy costs, so they can decide if they can survive."

Scottish Engineering has warned that even healthy firms are being forced to the brink of closure.

Mr Sheerin added: "One of our members has seen its energy bill rise from £15,000 a month to £80,000 a month. That's a level which puts its future at risk.

"So they've had to talk to their accountants about voluntary liquidation - even though their order book is filled to the middle of 2023.

Connectors for tanks

"Right now they're working on connectors to be shipped to Poland for Ukrainian tanks which are desperately needed."

Alan Soady, from the Federation for Small Business told the BBC "all businesses are vulnerable if they are energy users and let's face it, the problems in the gas market don't look they are going away in six months".

Unlike households - where there is a cap on the unit price for gas and electricity - there is no such mechanism for companies.

Firms have a huge variety of different contracts based on the intensity of their usage and the mix between gas and electricity.

Many big businesses also have their own energy buying departments and systems to insure themselves, or "hedge", against extreme price movements.

Also, unlike households, there is no price cap, and therefore no moment when everyone's bills will change.

Firms typically have one or two-year fixed contracts, but a significant number - the CBI estimates a third - traditionally come up for renewal before winter and in October.

It has been reported that the total price tag for supporting UK businesses and households through this energy-cost crisis could exceed £150billion and might even run as high as £200billion - almost three times what was spent on the pandemic furlough scheme


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