Andrew Lewer MP: Shocking story of Northampton firm’s gas bill going up by 1,544 percent without Government help

What a week it has been since the announcements by the new Chancellor of the Exchequer.

A ‘financial event’, a ‘mini budget’? Well, neither of those descriptions effectively convey the sheer scale of it.

The decisions made will be discussed for months and are as far away from being ‘Westminster bubble’ as can be imagined.

Taxation announcements by Kwasi Kwarteng — and the implications for borrowing — in some respects took away the limelight from what was a major announcement by the Prime Minister, Liz Truss, of government intervention to help people and businesses survive the truly immense rises in energy costs that have been burdening us all.

I was contacted by one local Northampton company recently with a story that truly shocked me.

Its electricity bill has risen by 519 percent from £240,000 to £1,300,000 and their upcoming gas bill contract renewal has been quoted at an eye-watering £740,000… an increase of over 1,544 PERCENT.

Previously, it was £42,000.

They are, as a company, intense users of energy, but even so the scale of these sort of figures have few, if any, parallels across modern history.

Price rises like these would bankrupt this normally comfortably profitable firm yet other small businesses on the high street have been telling me of similar challenges, especially pubs, restaurants and cafes.

Without the government’s intervention our local high street and SME firms in Northampton that create so many jobs would be obliterated and I doubt that Abington Street and St Giles Street would ever recover from such a seismic shock.

It is worth outlining the depth and breadth of the support on offer.

From October 1, there is the £2,500 a year Energy Price Guarantee; a cap on energy in force for two years — it is a per unit cap, so you still pay for what you use.

It is estimated that this will generate savings of at least £1,000. In addition to the £400 Energy Bills Support Scheme already announced, the most vulnerable will also continue to receive £1,200 of support.

The government will cover the £150 by paying the environmental and social costs, including green levies, currently included in domestic energy bills for two years.

Putting these two together, the average household will save at least £1400 for the next year compared to the October 2022 price cap.

For businesses the Energy Bill Relief Scheme is a temporary six-month scheme across the country that will protect businesses and other non-domestic energy users — including charities and public sector organisations — from rising energy bills this winter by providing a discount on wholesale gas and electricity prices.

A new Energy Supply Taskforce will negotiate long-term agreements with major gas producers.

The Government is also working with electricity generators to reform outdated market structures where gas sets the price for all electricity.

The £40 billion Energy Markets Financing Scheme, delivered with the Bank of England, will help to address extraordinary liquidity requirements faced by energy firms from high and volatile energy prices.

It will provide a backstop source of additional liquidity to energy firms in otherwise sound financial health to meet extraordinary variation margin calls. It will be limited to those making a material contribution to the liquidity of UK energy markets and who are thereby systemically important to the UK economy.

This will also provide liquidity to firms through a 100 percent guarantee, delivered via commercial banks, and will open to applications from October 17.

Even with all this help, the situation on our high street and with our SME businesses will be tough this winter.

We need to have a concerted ‘use it or lose it’ mentality to those local businesses that matter so much to us.

I hope we can get together to support our high street shops across Northampton this autumn and winter.