Home Business News ‘The devil is in the detail’ and businesses need urgent financial help to ‘weather the storm over the coming months’

‘The devil is in the detail’ and businesses need urgent financial help to ‘weather the storm over the coming months’

by LLB Finance Reporter
8th Sep 22 4:43 pm

Following Liz Truss’ announcement on Thursday the energy price cap for households and a similar 6 month offer for businesses there are real risks many businesses will go insolvent.

The government has remained dark over what support businesses will receive and what exactly this will be.

Many businesses are already closing their doors especially in the hospitality industry and in the coming weeks thousands of jobs are at risk.

Risk expert, Owen Bassett, at Atradius told LondonLovesBusiness.com, “While the support package – in the form of an energy price cap of £2500 per yer – confirmed by the Government today will help to ease the worries of households across the UK, thousands of firms remain in the dark about how exactly they will cover their costs beyond this winter and into next.

“The Prime Minister announced an “equivalent guarantee” for businesses for the next six months from 1 October, but it’s not entirely clear what this means for the spectrum of different industries, particularly beyond the 6-month mark.

“Organisations in more vulnerable positions will get additional support after this point, but it remains to be seen which sectors will fall into this bracket.

“Sectors that are highly reliant on energy, such as retail, manufacturing and metals and steel will likely be candidates. Hopefully we’ll understand more about this when we get sight of the detail.

“The data already indicates a bleak picture with more than 5,600 company insolvencies registered last quarter – 13% higher than the first quarter of this year and 81% higher than Q2 2021. This is the highest failure rate in almost a decade.

“So far this year 13,086 businesses have been made insolvent across England, Wales and Scotland – 87% more than last year.

“With many fixed-rate tariffs ending for businesses this October, the government needs to act fast and announce support before businesses are forced to close their doors, potentially putting thousands of jobs at risk. The devil is in the detail, and we’re looking forward to seeing how the government will act to help businesses weather the storm over the coming months.”

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