Source · Select Committees · Public Accounts Committee
Recommendation 21
21
Accepted
Reduced energy support risks businesses closing and wider economic objectives for government.
Conclusion
The reduced support could risk the Department achieving its wider economic objectives for the EBRS, such as reducing the effect of inflation and protecting jobs.48 The Federation of Small Businesses (FSB) told us that if energy prices remained high and the EBRS was taken away, 24% of their members would consider closing, downsizing or radically restructuring.49 While gas prices have recently fallen significantly from the record-high levels in 2022, the FSB and Hospitality UK told us that they were concerned in particular about businesses that signed up to a fixed energy tariff in the second half of
Government Response Summary
The government, perceiving an implicit recommendation, states it agrees and has implemented it. It details ongoing actions including reviewing the tax system, engaging with stakeholders, and commissioning an evaluation of the Energy Bill Discount Scheme and Energy Bill Relief Scheme.
Government Response
Accepted
HM Government
Accepted
4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 When keeping the tax system and reliefs under review, HM Treasury takes into account cost, wider pressures on that sector and how taxes affect the broader economy. HM Treasury carefully considers the impact that a relief will have on different industries and engages with a wide range of stakeholders to inform this analysis. The government does consider the impact of the overall tax burden – including business rates – on different sectors and did so for changes in March 2023. 4.3 The government introduced the Energy Bill Discount Scheme (EBDS) from April 2023 to ensure eligible businesses with will receive a discount on their bills for a further 12 months following the end of the EBRS. To design the EBDS, the Department of Business, Energy & Industrial Strategy (BEIS) developed a framework to assess which sectors may be most affected by rising energy prices. 4.4 HM Treasury has provided further detail of the analysis performed to aid decisions on tax and energy measures in a letter to the Committee sent alongside the publication of this Treasury Minute. 4.5 The Department for Energy Security and Net Zero will publish the scale of the discounts provided under the EBDS, including to Energy and Trade Intensive Industries (ETIIs), on Gov.uk on a monthly basis. The department is commissioning an evaluation of the energy support given to organisations under the EBRS and EBDS, including ETIIs. This involves research with ETIIs on their awareness, experiences, perceptions and the support that they have received. The overall effectiveness of delivery, impact and value for money of the schemes will be assessed. The evaluation is expected to run until summer 2025 and the findings will be shared with the Committee when available.