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Jacob Rees Mogg: Galvanises businesses with action on energy

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Westminster unveils energy support for businesses

NON WEDNESDAY, September 21, the UK Government announced new support for households, businesses and public sector organisations facing rising energy bills in Great Britain and Northern Ireland.
Through a new government Energy Bill Relief Scheme, the government will provide a discount on wholesale gas and electricity prices for all non-domestic customers (including all UK businesses, the voluntary sector like charities and the public sector such as schools and hospitals) whose current gas and electricity prices have been significantly inflated in light of global energy prices.


The support will be equivalent to the Energy Price Guarantee put in place for households.


It will apply to fixed contracts agreed on or after April 1, 2022, and to deemed variable and flexible tariffs and contracts.


The Price Guarantee will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial six-month period for all non-domestic energy users.


The savings will be first seen in October bills, which are typically received in November.


As with the Energy Price Guarantee for households, customers do not need to take action or apply to the scheme to access the support.


Support (in the form of a p/kWh discount) will automatically be applied to bills.

RISK OF BUSINESSES MISSING OUT

The price reduction level for each business will vary depending on their contract type and circumstances.


Non-domestic customers on existing fixed-price contracts will be eligible for support as long as the contract was agreed on or after April 1, 2022.


Provided that the wholesale element of the price the customer is paying is above the Government Supported Price, per unit energy costs will automatically be reduced by the relevant p/kWh for the duration of the Scheme.


Customers entering new fixed price contracts after October 1 will receive support on the same basis
those on default, deemed, or variable tariffs will receive a per-unit discount on energy costs, up to a maximum of the difference between the Supported Price and the average expected wholesale price over the period of the Scheme.


Non-domestic customers on default or variable tariffs will therefore pay reduced bills, but these will still change over time and may still be subject to price increases.


The government is working with suppliers to ensure all their customers in England, Scotland and Wales are allowed to switch to a fixed contract/tariff for the duration of the scheme if they wish, underpinned by the government’s Energy Bill Relief Scheme support for businesses on flexible purchase contracts, typically some of the largest energy-using businesses.


The government will provide equivalent support for businesses not connected to the gas or electricity grid. Further detail on this will be announced shortly.

SUPPORT MUST AVOID
THE CLIFF EDGE

The government will publish a review of the scheme’s operation in three months to inform decisions on future support after March 2023.


The review will particularly focus on identifying the most vulnerable non-domestic customers and how the government will continue assisting them with energy costs.


Prime Minister Liz Truss said: “I understand the huge pressure businesses, charities, and public sector organisations are facing with their energy bills, which is why we are taking immediate action to support them over the winter and protect jobs and livelihoods.


“As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind.


“At the same time, we are boosting Britain’s homegrown energy supply, so we fix the root cause of the issues we are facing and ensure greater energy security for us all.”


Kate Nicholls, CEO of UKHospitality said: “This intervention is unprecedented, and it is extremely welcome that the government has listened to hospitality businesses facing an uncertain winter. ef
“The government has recognised the vulnerability of hospitality as a sector, and we will continue to work with the government, to ensure that there is no cliff edge when these measures fall away.”

SOME BUSINESSES WILL FALL
BETWEEN THE CRACKS, SAYS FSB

Tina McKenzie, Policy and Advocacy Chair, Federation of Small Businesses (FSB) said: “This announcement will give certainty for the next six months, but a tough year remains ahead of many small firms.


“Many have been waiting for details on the energy bills support package to plan confidently for the winter and beyond, so it’s encouraging to have clarity from the Government on the form that its support will take.


“The next stage will be for small businesses to learn what the changes mean for their current contracts and for any offers they have been looking at.


“Subsidising the unit costs of electricity and gas for six months is welcome, but there are those who miss out from before the six-month period, and help must not result in a cliff-edge afterwards.
“We are calling for a hardship fund to be created for those who fall outside of the current support or for whom the current support will be insufficient.


“There will be hardship for some businesses which signed fixed contracts after prices rose but before April, who find themselves excluded from the scheme.


“FSB calls on energy suppliers to allow those customers to switch without charge to new fixed contracts, covered by the Energy Supported Price if that makes the difference for the small business to survive.


“Small businesses are the definition of vulnerable when it comes to these energy price hikes. Small firms do not have the ability to hedge, or negotiate energy prices, so we will be encouraging Government to continue to help small businesses across all different sectors after the six months have elapsed.”


Ms McKenzie called for common sense and understanding from the energy industry, which will continue to reap massive profits: “Energy companies must play their role to support their small business customers.


“Energy providers must pass on the benefit of the freeze in full and must immediately provide updated bills and quotes to each small business customer who will be wondering today what the changes mean for them.


“We’re concerned that there is no mention of a cap on rises to standing charges, which are the other main element of energy bills. While households’ standing charges will be capped, the same can’t be said for businesses. 

“We call on energy suppliers to support their small business customers by committing to lowering standing charges as far as possible.


“We’d like to see energy companies promise not to disconnect businesses from energy supply that are currently unable to pay for their energy bills this winter and not ask for disproportionate upfront payments.


“Currently, small firms could be disconnected from energy supply if they cannot pay bills after 30 days.
“We will be writing to energy companies in this regard and encourage them to support their small business customers in this difficult period.”

SHORT-TERM FIX FOR
LONG-TERM PROBLEM

Matthew Fell, CBI Chief Policy Director, said: “We welcome the government’s quick and decisive action to provide hard-pressed businesses with a substantial short-term fix to a long-term problem.
“The package will ease worries about otherwise viable businesses shutting up shop, and smaller companies especially will benefit from the discounted rate.


“Businesses will also want to know more about the exit strategy and what happens when the six-month cap runs out. Working closely with businesses will be key to successful implementation.


“The long-run solution is to double-down on energy security and to incentivise firms to push ahead with ambitious energy efficiency programmes to lower demand.”

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Port of Milford Haven now official ‘a great place to work’

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THE PORT of Milford Haven has been officially accredited as a Great Place to Work-Certified™ organisation. As the first Port Authority in Britain to secure this Certification™, it is a significant achievement.

“We are very proud to be Great Place to Work-Certified™,” said Vidette Swales, HR Director at the Port of Milford Haven. “It means so much that our employees have reported a consistently positive experience with their colleagues, their leaders and their jobs. Offering a positive employee experience is not only beneficial for the people who work with us but is also key for our continued business success.”

Tom Sawyer, CEO at the Port of Milford Haven added: “Our team is operating the UK’s leading energy port, and it is of the utmost importance that we do that safely, responsibly and effectively. We’re striving for excellence and aim to provide a world class service to our customers as well as supporting sustainable coastal communities for the prosperity of future generations. Our employees are clearly at the centre of this which is why I’m delighted that they feel supported in their role. I’m especially proud that this Certification™ demonstrates our core values of Safety, Excellence, Collaboration and Sustainability so perfectly.”

“We congratulate the Port of Milford Haven on achieving their Certification™,” said Benedict Gautrey, Managing Director of Great Place to Work® UK. “Organisations which put the employee experience at the heart of their business gain their employees’ trust and, in turn, are truly able to build a great workplace culture that delivers outstanding business results.”

Find out more about careers at the Port of Milford Haven here: www.mhpa.co.uk/about/careers-at-the-port/.

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One in five now accessing Ogi’s Wales-based full fibre network

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Welsh full fibre telco – Ogi – has reached two thirds of its planned first phase rollout with one in every five premises now signed up to one of its home or business services. 

Kick starting its ambitious FTTP [Fibre to the Premises] rollout in 2021, Ogi propelled onto the UK telcomms scene with a £200million plan to bring full fibre to south Wales much sooner than planned by the incumbent operators.

The business shifted its approach at the beginning of 2024 to focus on customer take-up – attracting thousands to the full fibre switch thanks to a new competitive pricing and shorter-term contracts strategy.

Gaining first mover advantage in places like Pembrokeshire and the post-industrial towns and villages of the south Wales valleys, the fresh approach has served the provider well, with a sector-leading high customer satisfaction score to match. This comes following a targeted period of investment in back office operations and customer service, with new 7-day opening hours and refreshed online resources among the changes introduced earlier this year. 

Amid rising competition from the UK’s largest telcos, increasing build costs and other market pressures, the Gigabit-capable provider continues to see customer adoption increase, with one in five joining the network in 2023, with places like Pembrokeshire seeing double that rate of growth.

Chief Executive Officer, Ben Allwright, said: “With one in five of the premises we can serve already signed up to Ogi, it’s clear to see we’re investing in the right places. Passing the 100,000 premises milestone – two thirds of our initial plan, completed – and seeing the massive benefits from this technology as adoption increases is encouraging. 

“Putting our ISP operations first since the start of the year, and harnessing the build machine as a tool for growth has allowed us to take a breath, and make sure we’re doing the right things for our customers and long-term sustainability. While we might not be as visible installing new network as we had been – we’ve been busy in the background, supporting our existing customer base and welcoming thousands more every month. 

“We’re building something really exciting here at Ogi; and the people of Wales are invested in our journey to create a real challenger brand – one that Wales can be proud of, and others are already envious of.”

The network is currently being rolled out in around 60 towns and villages across south Wales, with thousands of customers joining the full fibre ISP every month. The Wales-based telco offers broadband and phone services for home and a suite of IT, connectivity and security options for business, with a new wholesale opportunity recently added to the portfolio for high capacity users.

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Carmarthenshire cheese factory owner speaks out in bad odour row

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THE DIRECTOR of a mozzarella factory which supports 140 dairy farmers has insisted he wants to be a good neighbour following complaints from a small number of people about noise and odour.

Steve Welch, of Dairy Partners Ltd, said acoustic barriers were installed in February to dampen the noise of liquid natural gas (LNG) deliveries at the site in Aberarad, near Newcastle Emlyn, Carmarthenshire. He said the company employed 75 people and served a growing market. “We’re expanding – that’s an indicator of our success,” he said.

Environment regulator Natural Resources Wales (NRW) had visited three months earlier, in December 2023, and found that the noise of pressurised LNG deliveries did not comply with Dairy Partners’ site permit. The NRW officer’s report said there was “an offensive and continual tonal noise originating from the direction of LNG tanker and LNG tank”, but no odour problem was detected.

NRW issued what’s known as a compliance assessment report in February this year requiring the company to take action. The regulator said this wasn’t the same as a formal enforcement notice, and that it was continuing to monitor noise and undertaking “detailed dialogue” with Dairy Partners.

Mr Welch said the LNG supplier it had been using exited the market last autumn. This supplier, he said, had a “silent” gravity-fed tanker which took six to eight hours to complete its delivery. He said all the available alternative LNG suppliers used a pressurised delivery system which was quicker, reduced the risk of spillage and was more economically viable. The company switched to the pressurised delivery system, which led to complaints about the accompanying noise.

Mr Welch said Dairy Partners tried using different tankers and built a wooden pallet stack to try to mitigate noise before investing in the sound-dampening panels, which he said made a big difference. He added that Dairy Partners was working with NRW to modify its site permit to reflect the use of the pressurised LNG deliveries.

Site manager Daryl White said liquid natural gas powered the factory and that there was one delivery per week during daytime hours between Monday and Friday, lasting one hour.

Dairy Partners measures the decibel level of LNG deliveries and Mr Welsh said the noise rated as “moderate to soft” when heard at the nearby roadside. A resident living just across the road, Megan Ceiriog-Jones, said she had recorded a higher decibel level, and that the sound of other operations such as night-time “venting” which she had recorded on video were disruptive. “The noise videos are just a sample of noise complaints that are sent to NRW on a regular basis,” she said.

Dairy Partners said further noise-dampening measures would be added as a condition of planning approvals for wastewater and cleaning tanks which were decided by Carmarthenshire Council’s planning committee last month. A handful of objectors opposed the retrospective applications, including Ms Ceiriog-Jones and Stephen Rees, who both addressed the committee. Ms Ceiriog-Jones said the effects of “noise and sleeplessness are hard to quantify”, while Mr Rees said the reality for residents living by the cheese factory was “considerable disruption”. Ward councillor Hazel Evans addressed the committee to say that Dairy Partners was a large contributor to the local economy and that she was reassured by the many planning conditions proposed by the planning department. She said she understood that some nearby residents weren’t happy, although they didn’t wish to see the factory close.

Speaking to the Local Democracy Reporting Service, Mr Welch said the company logged all complaints, had attempted to talk to Ms Ceiriog-Jones, and wanted to have a positive relationship. He said: “We want to be good neighbours.”

Mr Welch said cheese had been made at the site since 1938, with previous owners including Canadian firms Saputo and McCain Foods, and an Egyptian family business.

Site manager Mr White said the factory was “on its knees” when Dairy Partners took over in 2013 and began investing in it and increasing production.

Every year around 200 million litres of milk arrives at the site from 140 nearby dairy farms. Nine hours after arriving the milk is turned into 2.5kg blocks of mozzarrella cheese, with the separated whey sent to another company where it is dried and sold in powdered sports nutrition products. Cream is also produced at the Aberarad site.

“Making cheese is really technical,” said Mr Welch, who is one of three Dairy Partners directors. “You’te taking milk and turning it into a stretchable cooking product which has a lot of different characteristics. You’re manipulating proteins, sugars and minerals in a reproducible product.”

Varying levels of salt can be added to the cheese blocks, which move slowly along a tray system in a brine solution before being packaged ready for onward delivery. Around a third of it ends up overseas in countries including Lebanon and China.

Mr Welch said the site produced around 22,000 tonnes of mozzarella and pizza cheese per year, and that it hoped to expand this to as much as 35,000 tonnes. He said the 75 jobs were highly skilled and that many more indirect jobs relied on the site. Mr White said haulage business Mansel Davies & Son had around 40 drivers who delivered to and collected from the Aberarad site.

Dairy Partners, which also has a base in Gloucestershire where its cheese is shredded, has an annual turnover of around £140 million. “The market is expanding – we can’t keep up,” said Mr Welch. “We’ve got to keep producing, and we are never going to be silent.”

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