Thousands of food businesses have been left in “limbo” after the government suspended talks on its energy bills bailout because of the death of Queen Elizabeth II.
A raft of industry bodies told The Grocer a shutdown of all government communication had left companies facing a “black hole” and questioning their viability.
While business leaders recognised the historic significance of the Queen’s death, they said it was unacceptable for Westminster to close down talks on implementation until parliamentary business returns again on 21 September.
Details on the bailout, first announced by new PM Liz Truss last Thursday, had been expected to be published in the following few days but The Grocer understands government departments have now told businesses there will be no communication for at least another week.
While the PM has indicated the support will be equivalent to the £2,500 a year cap on domestic energy bills, due to come into force from October, businesses have been left in the dark over how the scheme will work.
All businesses are to get six months’ support but it is unclear who will qualify for longer-term “targeted” support. There is also a lack of clarity over what will happen to the many companies who have taken out multi-year deals with energy companies, locking them into high prices, before the intervention was announced.
“I think the situation with government following the Queen’s death is a a real problem,” said one source. “There is a complete fog surrounding this vital policy.
“We had been expecting further guidance on how the bailout will work to have been published in the days following the PM’s announcement, but there has been nothing.”
British Meat Processors Association CEO Nick Allen said: “There was very little detail in last week’s announcement and there has been an absolute black hole of information since, which is very frustrating.
“It feels like they are just moving the cliff edge. There is a lot of frustration.
“We are desperately short of information on how the support for businesses will work. They’ve said there will be further help going forward for businesses, but what does that mean?”
Another source said: “I’m utterly frustrated at the government reaction to the sad news of the Queen’s death.
“She would have been the first person to recognise that the world has to go on but we’ve been notified by government departments that no communication will be going out until at least 21 September. It’s completely ridiculous. They need to crack on with running the country.”
Sources expressed fears the situation could lead to delays in an expected emergency fiscal intervention announcement which had been scheduled for next week, and that the party conference season could see government distracted even more from tackling the energy crisis.
The Grocer understands the government has also suspended a survey it had been running with food companies to get an up-to-date picture on the impact of soaring CO2 prices, which have added to fears of supply chain disruption due to shortages.
“The government needs to be getting on with the plans and it needs to be out there meeting businesses to see the situation they are facing,” said Rupert Ashby, CEO of the British Frozen Food Federation.
Shane Brennan, CEO of the Cold Chain Federation, said that while the bailout had been welcomed by companies, it did not provide businesses with any medium or long-term security.
“The government has announced support for six months,” he said. “Six months is not enough time. Six months means surviving the winter, not making long-term plans.
“We have to be realistic about how long government can artificially hold down prices. What we want to see is a longer-term strategy for energy.”
Ian Gadsby, MD of global energy generation company Ylem, said the government needed to urgently clarify questions over its support, including what would happen to companies who had negotiated long-term deals at sometimes staggering prices in recent weeks.
“The situation with the Queen’s passing means that the normal follow-ups from government have largely disappeared,” said Gadsby.
“We find ourselves in limbo land. There is very little details over what mechanisms will be used.
“Are companies that have locked into higher deals going to be able to get out of them? I think it’s impossible that companies will be able to get out of those deals without a penalty, but at the moment we just don’t know.
“Business desperately needs certainty.”
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