Businesses will see their energy bills cut for six months from October, Liz Truss has announced, in a major intervention to keep the economy afloat during the cost of living crisis. The government has announced it will cover almost half the cost of business bills with a “supported wholesale price”, in a move Chancellor Kwasi Kwarteng said would “stop the collapse of businesses, protect jobs and contain inflation”. . While businesses reacted with relief on Wednesday morning, British Chambers of Commerce warned that six months of support was “not enough to plan for the future”, as others expressed fears of a “cliff” as April approaches. However, Ms Truss pledged her government would “ensure that the most vulnerable businesses like pubs, like shops, continue to be supported” beyond the initial six-month period. And business secretary Jacob Rees-Mogg hinted that support for schools, hospitals and care homes could remain in place in 12 months as “it is obviously going to [need to] to be able to afford their energy in a year like today.”
Basic points
Show latest update 1663763781
Kwarteng will present estimates of the total cost of supporting new businesses on Friday
Estimates of the total cost of the government’s support package for businesses will be presented at the Chancellor’s budget event on Friday, Downing Street said. It is understood the money will go to suppliers, who will pass on the savings to non-residential gas and energy users, and will be fined if they don’t, pending legislation still being developed. An estimated 75 percent of non-domestic contracts are currently on fixed deals, with another 25 percent made up of variable and other types. Andy Gregory21 September 2022 13:36 1663762701
Voices | Sure, the Treasury can be irritating – but Liz Truss’s approach is wrong
Our columnist Salma Shah, former special adviser to Sajid Javid, writes: “I’m sorry, but the fact is that everyone hates the Treasury. OK, maybe the hate is a bit strong, but if you’re a minister or civil servant in any other government department, you’ve felt the painful sting of HM Treasury (HMT), narrowing your vision with their miserable worship of the scorecard and the twice-yearly bean-counting exercise, also known as the Budget. “So it is no surprise that Liz Truss has been relieved of permanent secretary Tom Scholar. The smug condescension you feel when the Treasury pours cold water on your plans and the audacity to make you look at the numbers to back them up can be a scarring experience. However, his removal was a mistake.” Her analysis is available in full with Independent Premium:
Opinion: Sure, the Treasury can be annoying – but Liz Truss’ approach is wrong
The challenges we face are as serious as any we’ve seen in a generation, and we could do without the infighting, writes Salma Shah Andy Gregory21 September 2022 13:18 1663761801
Rees-Mogg hints schools and hospital support could stay in 12 months
Jacob Rees-Mogg hinted that government support with energy bills for schools, hospitals and care homes could continue in a year. Asked if schools and other agencies facing it would get help in 12 months, Mr Rees-Mogg told Sky News: “Schools and hospitals and care homes will obviously (have to) afford their energy in a year also like today. Our political correspondent Adam Forrest has the full report:
Rees-Mogg hints schools and hospitals could get help with energy bills beyond six months
Energy bailout will cost ‘tens of billions’, says business secretary Andy Gregory21 September 2022 13:03 1663761081
Voices | Liz Truss will have to prepare herself to be unpopular – at home and abroad
Ahead of Liz Truss’ first foreign policy speech as prime minister to the UN general assembly, she told reporters she was prepared to be unpopular at home to take the “difficult decisions” needed to secure economic growth. But our political columnist Andrew Grice warns that “unless she stops harassing Brexit hardliners so she can resolve the Northern Ireland problem, Truss will also have to be prepared to be unpopular abroad”. He writes: “Trus will not be considered ‘reliable’ or ‘reliable’ until it resolves a self-inherited problem – the dispute with the EU over the Northern Ireland protocol for goods moving from Great Britain to the province. It casts a dark cloud over relations with the US as well as the EU, whose leaders Joe Biden and Ursula von der Leyen are meeting separately today on the sidelines of the UN assembly. “The mood music in the protocol is more upbeat since the politicians came together after the Queen’s death. Truss and Emmanuel Macron sidestepped the issue in their talks last night to focus on the positive. But whether the more conciliatory mood translates into tangible progress in the protocol negotiations is another matter. EU sources are bleak. “They see the Truss bill before parliament which allows the UK to bypass key parts of the protocol as a ‘gun on the table’. “Brussels officials tell me they want to see evidence that Truss really wants a deal and can tone down the ‘populist rhetoric’ she used to drum up votes in the Tory leadership contest.”
Liz Truss should prepare to be unpopular – at home and abroad | Andrew Grice
Biden is very interested in Northern Ireland and fears that Truss’s approach is jeopardizing the peace process Andy Gregory21 September 2022 12:51 1663760121
Stamp duty cuts risk ‘doing more harm than good’, warns expert
Homebuyers may welcome a possible stamp duty cut, but they could also end up paying higher monthly mortgage bills, an economist has warned. Ahead of Chancellor Kwasi Kwarteng’s mini-budget on Friday, The Times reported plans to cut stamp duty are in the works as part of efforts to boost economic growth. But Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, warned that the stamp duty cuts could “risk doing more harm than good”. “You can understand why the government is worried about the housing market because there is a risk that rising mortgage rates and rising prices will dampen buyer enthusiasm. We know from recent experience that a stamp duty holiday effectively stimulates demand,” Ms Coles said. “No buyer will ever complain about a tax cut, but if the government were to cut stamp duty it would be ignoring the fact that the real drag on the property market is a severe lack of supply. Stimulating demand without addressing supply problems would risk more buyers chasing a small number of properties, pushing prices up. It’s what we saw over the holidays for the coronavirus-inspired stamp duty. “By raising prices in an era of rising mortgage rates, the end result will be higher monthly mortgage costs, which will be increasingly unaffordable. That alone could be enough to deter buyers, so there’s a risk it could end up doing more harm than good.”
Liz Truss to ‘announce stamp duty cut in mini budget’
The move comes as the average UK house price rose by 15.5 per cent year-on-year in July Andy Gregory21 September 2022 12:35 1663759281
MPs return to the Commons to swear allegiance to King Charles
MPs returned to the Commons this morning to swear allegiance to the new monarch, King Charles III, and his “heirs and successors”. MPs are sworn in after every general election so they can take their seats, speak in debates, vote and receive a salary. The wording of the oath means MPs have already sworn their allegiance to the Queen’s heirs and successors, meaning they don’t have to do it again at this point. A total of 31 MPs pledged their allegiance to Charles during the first swearing-in session on 10 September. Normal business in the Commons will resume tomorrow. Andy Gregory21 September 2022 12:21 1663758730
Clarity needed on which firms to get energy bailout after six months, warns business chief
Scottish Chambers of Commerce chief executive Liz Cameron added her voice to calls for clarity on which businesses will be able to access support after the six-month deadline. “For those companies that will benefit, the six-month cap is not enough to give them sufficient assurance that the problem will not recur when the cap no longer applies,” he said, urging ministers to “get the vulnerable right.” industries listed for support after the initial six-month ceiling.’ Dr Jackie Mulligan, an expert on the Government’s High Streets Task Force, added: “This announcement is long overdue for many small businesses and the time they may have to wait for payments to be re-routed will exacerbate the already critical cash flow issues they face … Most businesses will also ask, what will happen six months from now?” Andy Gregory21 September 2022 12:12 1663758381
Business price cap will ‘undoubtedly’ cost tens of billions, says Rees-Mogg
Business secretary Jacob Rees-Mogg said the newly announced energy price cap would “undoubtedly” cost “tens of billions” of pounds, as he hinted at further support after the first six months. “The difficulty in giving a cost figure is that it will depend on where the price of energy goes over the winter and that is very difficult to predict,” Mr Rees-Mogg told Sky News. “So I can’t give you an absolute cost, but we are talking about many billions of pounds … it will be in the tens of billions, no doubt.” Pressed on why the cap for businesses would last six months, while that for households is for two years, the business secretary said: “It’s because it’s a much more complex market, with a whole variety of contractual arrangements. “What we needed now – immediately, quickly – was something simple that would give…
