Portsmouth shops and businesses praise emergency energy price cap - but call for government to offer more support

Businesses across the UK have been given an emergency package of government support including a cap significantly reducing the price paid for energy as the cost of living crisis continues to threaten livelihoods.

The government has announced a ‘supported wholesale price’ expected to be £211 a megawatt hour (MWh) for electricity and £75 a MWh for gas for businesses, which would be less than half the wholesale prices expected this winter.

The savings, which will be processed automatically and will also apply to fixed contracts signed after April 1, will be first seen in October bills, which are typically received in November.

For Geoff Priestley, manager of The Wedgewood Rooms in Albert Road, the announcement has him breathing a sigh of relief.

The music and comedy venue had been paying approximately £11,000 a year for its electricity before coming of its fixed contract earlier this year – resulting in forecasts of £61,000 a year in energy bills.

Now Geoff hopes the cap will keep costs below £20,000 a year.

He said: ‘If that is the cap level I will be sighing with relief. You aren’t going to fix this with one big thing. The answer needs to be lots of little things.

‘The two things that would help us would be a VAT cut, which would keep our beer prices and ticket prices suppressed, and business rate reductions.’

Daniel Nowland, director of Southsea Deli in Elm Grove, agreed that the government’s cap may mean a higher bill than previous years, but it was significantly better than the ‘terrifying’ winter businesses had been dreading.

With their previous energy contract having just ended, the business had managed to negotiate a new deal that would be three times more costly – while a switching to a variable rate contract would have seen energy bills four or even five times higher than those at the start of the year.

Daniel said: ‘It’s terrifying. And the price of everything has been going up. The price of cooking oil has really risen with the war in Ukraine.

‘A 30 per cent increase in electricity might mean a couple of hundred pound a month – that’s £50 a week. That’s manageable.’

Hampshire Chamber chief executive Ross McNally said: ‘This short-term cap is a step in the right direction but we need to see much more action from the chancellor in Friday’s mini-budget, specifically a comprehensive, long-term support plan to protect businesses, livelihoods and jobs.’

Landlord of The Fifth Hants Volunteer Arms in Albert Road, Southsea, Aidan Estell said: ‘I’m happy they are doing something. We can do with all the help we can get.

‘The prices have been rising so fast and a lot of pubs are still struggling from the Covid pandemic. Hopefully they will continue with the help and not put up prices drastically.’

Phil Estell, landlord of the Golden Eagle in Delamere Road, Southsea, said: ‘At least the government has done something. But it concerns me as a business we get taxed left, right and centre but the big fuel firms and investors pocket billions of pounds.’