Energy crisis: Liberal Democrats call for £10bn in grants for small businesses

The government has been urged to launch a £9.6bn grant scheme to help small firms hit by soaring energy bills.

Liberal Democrat leader Ed Davey made the call ahead of the new prime minister being announced on 5 September.

Small and medium sized businesses should be able to apply for a grant of up to £50,000 to cover 80% of the increase in gas and electricity bills, he said, with the funding paid for by raising the taxes imposed on banks.

That would include reversing the government's planned cut in the corporation tax surcharge paid by banks and returning the levy on banks' outstanding loans and interest payments to 2015 levels.

Tory leadership contenders Liz Truss and Rishi Sunak have both said they will look at how to help businesses if they become prime minister but they have not confirmed the exact support they would deliver on energy bills.

There is no energy price cap for businesses so they are facing huge increases in bills of up to 400% when they renew their contracts.

The Lib Dems' plan would provide funding to 1.4m UK SMEs with up to 250 employees.

'High streets risk being turned into ghost towns'

Ed Davey said the UK's "treasured high streets risk being turned into ghost towns" and the government should take action to help families and businesses as soon as Parliament returns next Monday. He added:

"Local shops, pubs and restaurants could all close their doors for the last time over the coming months unless the government steps up urgently.

"We need an energy bailout now to save the high street, rescue small businesses and keep prices down for families. This could be funded by reversing the Conservatives’ tax cuts for the big banks, and focusing on saving our struggling small businesses instead."

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