Businesses ‘will close their doors this winter’ unless helped with rising energy bills, UK Chamber of Commerce head says.
Baroness Ruby McGregor-Smith said the Government must take the same level of action as it did at the height of the Covid pandemic to help businesses.
She said the country needed an “action plan” to be presented next week.
Her comments come as Chancellor Nadim Zahawi said companies could get VAT cuts or other tax breaks.
The Times reported Mr Zahawi has been working on a multi-billion pound emergency energy strategy for the new prime minister, who will be elected by the Conservative Party and take office on Monday.
Baroness Ruby, a Conservative colleague, said the level of business support needed to be “particularly significant” for small and medium-sized enterprises (SMEs).
Unlike households, businesses are not protected by an energy price cap, which means their bills are typically higher. Pubs in particular are seeing their energy bills soar by up to 300%, and bosses from six of the country’s biggest breweries have called for “immediate government action”.
“One of the big measures that we are calling for and have been calling for for some time is the provision of Covid-style support in the form of a Government Emergency Energy Grant for all SMEs,” said Baroness Ruby.
“I think that unless there is immediate and urgent support, many companies will close their doors this winter.”
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The BCC president said the measures allegedly proposed by Mr Zahawi, including cuts in VAT and business rates for retail and hospitality, and tax breaks for energy-intensive industries, are “right territory” to help people this winter.
“We cannot get into a situation where more and more companies are closing down because of costs that are absolutely out of their control,” she added.
“We’re not just talking about big companies, we’re talking more and more about SMEs, which are the lifeblood of our economy.
“They need more support now than they did during Covid, it’s no different for us. All we have had publicly so far has been a lot of words and no plan of action. Now we need an action plan, we need a plan and we need to deliver next week.”
Pressure is mounting for the new prime minister to react quickly to the rising cost of living, with inflation, the rate at which prices are rising, at 10.1%.
Wholesale gas prices have risen since last year, but have recently deteriorated due to the Russian invasion of Ukraine and the Kremlin’s decision to curb energy supplies to Europe.
Small businesses across a range of industries have expressed concern about rising energy bills.
The government has previously said no new policies will be announced until the new prime minister, either Liz Truss or Rishi Sunak, is announced on Monday.
The Bank of England has forecast the UK economy to fall into recession later this year, while the BCC has predicted a gloomy picture and earlier recession, with three consecutive quarters of negative economic growth before the end of 2022.
Baroness Ruby said she didn’t think the government support would prevent a recession, but added the measures would help lessen the impact of a shrinking economy.
A Treasury spokesman told the BBC various “options” were being prepared for the next prime minister to make firm policing decisions.
“We understand people are struggling as prices rise and while we cannot protect everyone from the global challenges we face, we are supporting UK businesses through the coming months,” he said.
“We’ve cut taxes for hundreds of thousands of businesses by increasing employment subsidies and cutting fuel taxes. We’ve also introduced a 50% tax break for retail, hospitality and leisure businesses and curbed bill increases by freezing the £4.6bn business rate multiplier over the next five years.”
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