Where is the help for businesses being crippled by the energy bills crisis?

A man passes closed pubs and restaurants in Old Compton Street in Soho, London, which has moved into the highest tier of coronavirus restrictions as a result of soaring case rates.
It will be lights out for many businesses if they don't get urgent government attention, ITV's Peston writes. Credit: PA

Why is there seemingly so little focus in the energy crisis debate about the catastrophe facing small businesses?

Significant numbers are too small to hedge costs, their monthly power bills have quintupled over 18 months and they are fearful of running up unaffordable debts.

Many are already contemplating mothballing or closing their operations in coming weeks as their energy costs become unaffordable.

And this is a looming problem for all of us, because those employing up to 249 people have on their books more than 16m individuals and their turnover - on last available official figures - is more than £2.3 trillion.

If large numbers of otherwise viable small businesses fail, the damage from the recession, which may have already started, will be much longer lasting.

Even Labour’s hugely expensive plan to keep prices at the spring cap level would only help sole traders who work from home, because the cap on prices is for households, not businesses.

None of this is to minimise the imperative of averting acute hardship for those on low incomes.

In a rich liberal country, the idea that millions could suffer health damage because they would not be able to keep warm or eat properly should be an absurd idea.

But it is a real danger. Even so, protecting consumers, while leaving a dysfunctional market to wreak havoc on producers, businesses, would be self-harming.

As for the contestants to be PM, Liz Truss’s reversal of employers’ NI rise would help, though it is crudely targeted and is arguably not nearly enough for those most at risk.

Also as Rishi Sunak points out, her pledge not to increase the corporation tax rate helps only the biggest businesses, not the smallest ones that are most exposed.

Sunak however has said little about emergency help for small business, though he has said he would endeavour to help struggling high streets by prolonging cuts to business rates.

There are thousands and thousands of small independent stores, cafes, pubs and bars that struggle to break even in good times.

For them, the more than trebling in the per-unit energy cost since April is simply unbearable.

After Tory members have chosen the UK’s new PM, that PM needs to consider whether an economic stimulus that splashes only enough cash to help households pay their energy bills - a colossal sum in itself - would be only half a remedy.

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