North East business leaders have urged the Government to reconsider axing financial help for energy costs, warning they face “considerable uncertainty” heading into the new year.

Chancellor Jeremy Hunt has told business leaders that the current level of energy bill support for firms is “unsustainably expensive” and a reduced support scheme will be announced next week.

The Northern Echo:

Next week the Government will outline the conclusion of its review into its current support scheme in the House of Commons, the Treasury revealed in a statement.

But Thomas Lonsdale, Knowledge and Research Executive at the North East England Chamber of Commerce, said clarity and some future support will be vital for businesses leading into the spring.

The Chamber is also calling for engagement with local businesses, organisations and stakeholders who can ensure that any package of support is right for the North East.

The current energy bill relief scheme, which caps wholesale energy prices on electricity and gas at about half the expected market price, ends in March.

It claimed that extending the scheme in its current form could “cost tens of billions of pounds” depending on wholesale energy prices.

Mr Lonsdale said “The two main concerns for businesses in the North East are inflation and energy costs. These two issues are closely linked, and the fact that these concerns remain so high despite the existing commercial energy relief scheme shows how important some continuation of government support will be after the end of the current period of support.

“Our members are facing considerable uncertainty about what their financial situation will look like in the spring, and even though we consistently see how innovative and resilient our region’s business community is, clarity and some future support will be vital to ensure that businesses have the opportunity to adapt to the new energy landscape.

“Our message to the government would be to restate the fact that a healthy and vibrant business community, such as we have in the North East, is an essential vehicle for growth and resilient communities. Businesses also need to be able to plan effectively to manage the energy transition, so communication, collaboration and certainty will be vital moving forward.

“What we as a Chamber need to see most is consideration of local needs and engagement with local businesses, organisations and stakeholders who can ensure that any package of support is right for the North East.”

A Treasury spokesperson said: “The Government has protected businesses this winter from these high energy costs through the £18 billion Energy Bill Relief Scheme – one of the most generous support packages in Europe.

“However, no Government can permanently shield businesses from this energy price shock.

“The Chancellor was clear that this level of support is unsustainably expensive and that the current scheme was always time-limited to six months.”

The Chancellor heard concerns from business leaders over the current pressure caused by sky-high energy prices during the meeting.

Households have already been told that their bills will be capped until April 2024, albeit at a higher rate than the current £2,500 annual cost, while firms have been kept in the dark.

The revised scheme is expected to offer help with bills for a further year, until March 2024.

Mr Hunt had promised to give firms certainty over future plans for support by the new year, saying last month the announcement would come just before or just after Christmas.

Mr Hunt said at his autumn budget in November that the Government would have to target support only at the most vulnerable industries and would likely also have to lower the aid they receive.

Business groups railed against the plans, warning over job losses and company failures if universal support is withdrawn.

The Northern Echo:

Alex Cunningham, Stockton North MP, said: “The Chancellor boasts about protecting businesses and industries but the simple fact is his government’s short-termism and lack of any real planning to increase our energy resilience is a big part of the problem.

“Businesses need certainty in the long-term, not for a few months here and there, and they’re just not getting this from a Conservative Government more focused on papering over the cracks than developing anything meaningful.

“Sadly in Stockton North – and the picture is the same across the country – we’re seeing industries reduce their capacity and hospitality venues close in the face of high energy costs. I am fearful that unless the support from March is enough others may have to make the difficult decision to close, with jobs lost as a result.

“Time and again I have called on the government to produce an industrial strategy made in partnership with businesses and trade unions which would protect and create jobs, boost our energy resilience and help the sector to thrive.

“This strategy needs to extend to other sectors too like retail and hospitality. Support needs to be offered now and at a level that will actually help businesses, but the Conservatives need to start waking up to the need for a longer-term plan.”

North Durham MP Kevan Jones added: "Without further support this will mean that businesses and jobs will be lost throughout the North East.

"There is particular vulnerability for businesses with higher usage such as food and retail who are already suffering from the impacts of inflation and staff shortages.

"The Chancellor urgently needs to put in place a scheme which is properly targeted and will allow businesses to plan their costs for the future.

"Without this it is going to be a very grim beginning to 2023 for businesses and for many of their employees."