New PM acts on energy
In the first week of what proved to be a very challenging start to her new role, UK Prime Minister Liz Truss announced a package of support for both domestic and business energy users. The details are sketchy. But she has ruled out expansion of the “windfall tax” on energy companies; and has promised a new offshore oil and gas licensing round “issuing at least 100 leases”, while pledging to end the national ban on shale gas fracking and cut funding for renewable power by eliminating the “green levy”. However, she refused to reveal how any of these promises would be funded, instead deferring to a funding statement due next month.
‘Watch this space’
Since announcing this support package, Government sources have said that the help may be backdated because the precise mechanism and amount of support may not be finalised till November. The support for business was also time-limited to six months, with an option to extend support for “vulnerable businesses” – but, there was little indication of what that means.
On Wednesday 14th September, a spokesman for Liz Truss confirmed that the Government will confirm further details of the business support scheme next week. We will watch this space with eager anticipation.
Industry views on Ms Truss’s plans have been lukewarm – largely because there is not (yet) any detail to unpick. However, support for decarbonisation in the built environment remains a strong and consistent message: Gillian Charlesworth, CEO, Building Research Establishment (BRE) told EDIE: “Improving the energy efficiency of our buildings is one of the only viable ways to lower energy bills, which are now at record highs and set to rise even further in October. It is crucial that any plans to scrap green levies do not impact energy efficiency schemes, which are critical in delivering improvements.”
“I have every sympathy for businesses facing this energy challenges after the long period of lockdowns,” comments Kevin Cox, Managing Director, at Energys Group.
“It seems to me that while the price of energy continues to rise – and market turbulence is far from over -, there is strong logic in mitigating price rises by reducing demand. That’s what energy efficiency does. If you don’t use energy, you don’t pay.
“We are on hand to help both the private and public sectors at this complicated time – and have a wide range of experience in supporting commercial energy users with innovative low carbon solutions and funding options.”
Novel ways of coping
London Loves Business is reporting that small and medium-sized businesses should be proactive about finding novel ways to reduce energy consumption through the winter months and avoid relying on any Government-backed support package, according to tax and business advisers at accountancy firm, Menzies LLP.
Richard Godmon, Tax Partner at accountancy firm, Menzies LLP, said, “We are advising businesses to look for ways to reduce their energy consumption with immediate effect by examining their operating model and considering how it might be changed. Hospitality and leisure businesses could restrict opening hours and some have considered adopting a three-day week.”
Menzies LLPs advice recognised that office-based businesses may be able to alter shift patterns to optimise use of daylight hours or fast forward renovations to improve energy efficiency by introducing LED lighting, or switching to equipment that has a low power standby feature. Importantly, some of these renovations could also qualify for enhanced tax relief – and all are solutions we offer from our portfolio of low carbon technologies.
“Clearly, as previously outlined, energy efficiency measures have the potential to massively assist businesses at this challenging time,” concludes our MD Kevin Cox.
