Jeremy Hunt confirmed support for households will continue, but small and medium-sized businesses face an 80 per cent cut in relief in two weeks’ time.
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The Federation of Small Businesses said that “350,000 firms — 28 per cent — who signed fixed tariffs last year will need to shrink, restructure or close when their bills revert back to the higher rates on April 1.”
The Office for Budget Responsibility confirmed that energy business support will end up costing the Government a modest £545million this year — and this includes bigger discounts for energy intensive users.
Chris Noice at the Association for Convenience Stores said the huge jump in energy costs for small shops, such as local newsagents, would wipe out their profits this year and result in a wave of closures. He said: “The support now barely touches the sides. It’s actually insulting because the support is a meaningless token gesture.
“A lot of shops who had to renew contracts last year are facing their energy bills going up from £15,000 to £70,000. The support knocks just £1,900 off that.”
Andrew Crook, president of the National Fish Friers Federation, said: “Our energy prices are going up two or three times and the country’s much-loved chippies are facing higher costs from every angle. Many are having to shut up shop. We’re not just a service — lots of young workers start at a chippy for their first job and from there build confidence for the world of work.”
Pubs and bars received a boost from a beer duty freeze but Kate Nicholls, head of HospitalityUK, said it was needed as struggling venues were “still set to see huge energy price increases when current support ends in April.”
Many pub chains have faced demands for hefty deposits upfront from energy suppliers before agreeing to renew contracts.
Ofgem, meanwhile, has said its deadline for a market review is still months away.
FUND BOSS: SLOW ROLL CRISIS
THE boss of the world’s biggest fund manager has warned of “more seizures and shutdowns” after the collapse of SILICON VALLEY BANK last week.
BlackRock’s Larry Fink told investors the Californian tech-lender’s demise was an example of “the price we’re paying for decades of easy money”.
He said financial systems now face a “slow rolling crisis”. Central banks’ policy to raise interest rates to tackle inflation had historically “led to spectacular financial flameouts” — and an institution with hard-to-sell assets may be another “domino to fall”.
BlackRock manages £7.1trillion of money and is a top shareholder in many of London’s biggest-listed firms.
ZARA HAS SPRING IN STEP RISE
SHOPPERS have flocked back to Zara’s stores to buy its new spring-summer fashion edits, lifting profits at parent Inditex by more than a quarter.
Inditex said that sales were 15 per cent higher than pre-pandemic levels in 2019, as they hit £28.6billion.
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The company revealed its 27 per cent net profit increase in 2022 in its first full year under the leadership of Marta Ortega, daughter of multi-billionaire founder Amancio Ortega.
Bosses said that Zara’s move to start charging for customer online returns had no impact on its sales.
Despite the strong results, shares in Inditex fell as it said it would continue to plough money into automating its business, including replacing shop security tags with anti-theft technology.
Meanwhile rival fashion giant H&M disappointed investors by missing expectations with a lower 12 per cent rise in sales.
STANDBY COAL ASK
THE Government has asked the National Grid to explore whether its emergency back-up measures can be repeated this winter.
Five coal power generators were kept on standby this winter in case energy supplies ran short but they were only put into action last week during a cold snap.
The cost of keeping coal contracts in place could be up to £420million. Britain had intended to stop using coal stations by October 2024.
DEPT STEER BOSS
JOHN Lewis has hired its first ever chief executive to “drive performance and profitability” as it struggles with another year of losses.
Nish Kankiwala, a former Hovis and Burger King executive, comes just two weeks after the abrupt departure of Pippa Wicks, who ran its department store.
The Partnership is due to post a £50million loss today and its staff bonus is in doubt.
Chairman Dame Sharon White said she can now focus “on the preservation of our distinctive character”.
SHINE OVER BULB
THE bailout and sale of Bulb to Octopus Energy should see the government recouping all its cash and profiting, says a budget watchdog.
In November the Office for Budget of Responsibility forecast the deal could cost taxpayers £6.5billion. Now it expects lower costs due to falling wholesale prices.
It said Octopus had pledged to repay £3billion and that could see a £1.2billion profit for taxpayers.
The deal is still being challenged by rivals who have slammed it for secrecy.