Northern Ireland industry bodies sound the alarm over new energy discount scheme

Chancellor Jeremy Hunt has announced a cut to the financial support offered to non-domestic energy customers.

The existing scheme, in place since October, sets a limit on what energy firms can charge for certain elements of the bills given to businesses, public sector organisations and charities. The difference between the prices set by the energy firms and the price limit under the scheme is covered by the public purse.

Mr Hunt announced on Monday in the House of Commons that the new scheme, which takes effect from April 1, will effectively increase the price limit.

Steven Kelly, chief executive of Manufacturing NI, told the News Letter the increased costs to industry are likely to be significant.

"For most manufacturers, their energy bill is usually the third largest input cost - after the supply chain costs and labour costs," he said.

"So this represents a very large expense - for some businesses it's tens of millions of pounds per year, and for smaller businesses it's thousands of pounds each month. It's a big bill."

He continued: "The big problem with this is two-fold. One issue is that even with the existing scheme, many businesses are falling outside the scope of that just by the way that they are contracted. It's a really complex market and there are already businesses falling out of the scope of the support. So raising that target price to 30.2p means that many other businesses are going to fall outside the scope."

He added: "The second thing to say is that we have concerns around how the current scheme has operated, and we have actually raised them with the government. We had hoped the government would have reviewed that and put some controls in place, but it doesn't appear at this stage that they have. Instead of the money going to the consumer - whether domestic or business - it is going to the energy firms who are making significant profits because of this."

Retail NI chief executive Glyn Roberts, meanwhile, said: “The new package of business support is woefully inadequate. By moving to a subsidy on energy bills and failing to target specific sectors or those worst affected, the government has spread support over every type of business, the result being a level of subsidy that is ultimately pointless.

“Make no mistake, local shops will go out of business if the government does not rethink its approach before April. Retailers who struck contracts at the peak of the wholesale energy price will still see their bills quadruple even with this meagre support, blowing their commercial model out of the water”

“In Northern Ireland the problem is much more acute. Our members are not getting the same level of Business Rates Relief the rest of the UK is getting.

"English independent retailers receive 75% discount on their rates bill, while their Northern Ireland counterparts are getting nothing.”