8:00 am, December 18, 2022
Car dealers in need of additional support to help with spiralling energy bills when the current scheme ends will get more information next week, the government has promised.
The current programme of support will end in the Spring, leaving several wondering how they will survive longer-term.
Business Secretary Grant Shapps has now confirmed that an announcement will be made ‘very shortly’ and firms can expect ‘more details’ next week.
The details are set to come from the chancellor, Jeremy Hunt, as part of a review announced in last month’s autumn statement.
There have been mounting calls for clarity on what help will be available to businesses after the current scheme – which caps wholesale energy prices on electricity and gas at about half the expected market price – ends on March 20.
Speaking to BBC Radio 4, Shapps said: ‘I can tell you that the Chancellor announced a review of that in his autumn statement.
‘He will come out very shortly, in fact next week, with some more details for business, so there will be a little bit more certainty around that.’
Hunt is said to be considering plans to keep support in place for all UK companies after the existing scheme draws to a close, in what would mark a U-turn on aims to target only the vulnerable sectors.
Like households, whose energy bills will continue to be capped – albeit at a higher rate – until April 2024, businesses could see their support extended at a less generous level beyond March, according to the Financial Times.
Pressed on whether extending help for some sectors over others could amount to picking winners and condemning losers, Mr Shapps declined to shed further light on the plans.
Car Dealer has previously reported on how the energy crisis has affected the used car industry.
Nathan Tomlinson, dealer principal at Devonshire Motors, told us in August: ‘We are coming off a fixed contract this autumn and even using outsourced procurement we’re looking at an increase on gas of circa 265 per cent – which puts our annual cost into six figures!
‘As such, we’re currently undertaking a very aggressive review of how we use energy across the dealership and our two bodyshop sites. We’re also looking at a number of alternative solutions to replace traditional energy sources.
‘Fortunately, we’ve always punched well above our size in terms of profitability so we can take the pain. Fundamentally though, increases like these could finish many businesses.
‘Those that can absorb the increases have no way to pass costs on, and why would you want to anyway? That will only worsen an already delicate retail situation.
‘The other obvious “quick fix” is to make cost savings elsewhere in the business.
‘But for a sensibly run business with ambition, there aren’t many savings to be made that don’t impact on the goal you’re trying to achieve.’
