Sadiq Khan has slammed the government’s newly-announced measures for helping businesses and other organisations cope with escalating energy bills through to the spring, claiming they are insufficient and too short-term.
In a terse response to the energy relief scheme, which follows the energy price guarantee for assisting households with bills unveiled by the government earlier this month, the Mayor criticised what he called “a lack of clarity about ongoing support beyond six months” and said “most small businesses and schools still face a cliff edge in the spring” and will be “unable to plan ahead”.
Echoing Labour’s national call, Khan said energy companies “making huge profits off the back of Putin’s war in Ukraine” to be charged more tax to meet the cost of the support instead of it being eventually met by the public due to the government borrowing money to compensate energy companies for charging less.
The government scheme is expected to cut business energy bills to half the level they would otherwise have been, but Khan also asked for a “comprehensive support package”, including value added tax reductions and business rates relief, “to avoid potential business closures and job losses”.
Khan reaction to the energy relief scheme comes after new Prime Minister Liz Truss launched a string of attacks on him at the final hustings of the recent Conservative Party leadership campaign, which took place at Wembley before an audience primarily composed of London Tories. Truss accused him of being “anti-business”, anti-growth” and insufficiently “tough” on crime, and called for his defeat at the next mayoral election, due to take place in May 2024.
The Mayor hit back, saying he did not apologise for being “anti-poverty, for being anti-climate change and for being anti-crime” and said London has suffered from “huge underinvestment over the last few years”. Relations between national government and City Hall were strained through most of Boris Johnson’s time as PM, notably over funding for Transport for London.
Others have greeted aspects of the relief scheme, while issuing their own warning that more help could be needed. Muniya Barua, managing director of policy and strategy at BusinessLDN (formerly London First) said it “staves off the threat of mass bankruptcies for now, but may not go far enough for those firms already graining under the weight of Covid-related debt”. She added: “The government must keep all options open if prices spike further, or risk seeing the impact only delayed to spring rather than avoided.”
London Chamber of Commerce and Industry chief executive Richard Burge welcomed today’s announcement as “a clear step in the right direction towards saving businesses and jobs” and as providing “at least some respite during the winter months” but expressed caution about the government’s approach to what will follow, saying it “threatens to draw businesses towards another cliff edge in March 2023”.
Burge said there are “further steps to take that would facilitate business investment by creating greater clarity over the medium term”, stressing that investment has still not recovered to its level prior to the UK’s departure from the European Union and urging the government to “enact a long-term plan that invites business confidence, boosts productivity and delivers economic growth for the UK”.
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