The Shorthand – a freeze on bills, silence on crypto

Welcome to The Shorthand, your weekly digest of news stories that affect small businesses in the UK, breaking down what's happening and why you should care.

And all in under 5 minutes.

1. Truss’ energy bill cap: a welcome relief or too little, too late?

What’s happening here?

This week, we learned that Liz Truss was chosen to become the new leader of the Conservative Party – beating rival Rishi Sunak by 81,326 votes to 60,399. Importantly, Truss also became the UK’s new prime minister, inheriting a to-do list of economic challenges such as shielding the country from soaring energy bills and finding a solution to spiralling inflation.

On Thursday, the prime minister revealed plans for a two-year cap on household energy bills, limiting the average household bill to £2,500 a year from October.

She also announced that businesses, schools and charities would receive an “equivalent guarantee” on energy prices for six months, with further support for “vulnerable” businesses such as pubs. In three months, there will be a review to identify where the extra support should be targeted.

Why should you care?

Little is known about the specifics of Truss’ plan for businesses, and the response has been a mix of cautious relief, a plea for more information and calls for further action.

Highlighting several unanswered questions, National Chair of the Federation of Small Businesses (FSB) Martin McTague said:

It’s a huge relief for millions of small businesses to hear confirmation they will be part of the government’s plans to help on energy. Many have been pushed to the brink by crippling energy bills, and so it is welcome that help is on the way.

However, the announcement is very high-level and sparse on detail so we will be working with the new government to clarify what happens next. Small businesses’ instant reaction is that this is not enough information, yet, for them to plan.

Meanwhile CEO of UKHospitality Kate Nicholls criticised the plans for not going far enough. She commented:

We very much welcome the prime minister’s recognition of the specific struggles the hospitality industry faces and the promise of further support, alongside her positive plan to help consumers and businesses tackle rising energy bills.

While the welcome energy price freeze will ease the pressure on our customers and colleagues, high bills will still constrain spending in the sector and operators themselves will still have to fund energy bills and other rising costs. For many hospitality businesses this will prove too much to bear and hundreds of community assets will be shut and jobs lost unless additional support is brisk and bold.

2. UK crypto heads into the unknown

What’s happening here?

While the new prime minister has started to lay out tangible policies for energy prices, her stance on crypto is much less clear, which is said to put the UK’s prospects as a crypto hub in limbo.

During his time as chancellor, Rishi Sunak emerged as a champion for crypto, with a call for stablecoins to be regulated like non-banks and a request that the UK’s Royal Mint create its own non-fungible token (NFT). By contrast, Liz Truss and new chancellor Kwasi Kwarteng have both remained relatively tight-lipped, leaving the UK’s digital asset industry in the dark about the future of crypto policy.

Why should you care?

In the short term, these new appointments mean that businesses looking to work with the government on crypto policy may now have to start from scratch. And with the many other challenges on the prime minister's agenda, there’s a risk that proposals for the future of crypto will be shelved indefinitely.

But while Truss and Kwarteng remain unknown entities to the digital asset industry, there’s also reason for business owners and investors to be hopeful.

In recent years, many crypto companies have left the UK after failing to meet the Financial Conduct Authority’s high standards on anti-money laundering. This led to concerns that the UK was losing its place as a world leader in financial innovation. Gilbert Hill, Chief Strategy Officer at Pool Data, said:

Despite Rishi Sunak’s ambitions for the UK to be the ‘global hub’ for crypto, it has fallen behind other centres such as Frankfurt and Zurich. Now there is a fresh opportunity to get on the front foot.

3. The struggle to juggle five ‘hats’ a day

What’s happening here?

The cost-of-living crisis has seen an increasing number of employers make the tough choice to reduce their workforce in order to cut costs.

This week, a new survey has revealed that small business owners are picking up the slack after letting staff go, with 40% taking on other roles within their workplace. Participants estimated that they wear around five different ‘hats’ a day, dabbling in areas such as finance, sales, marketing, admin, advertising and HR.

But among the 500 small business owners and decision makers who took part in the survey, 38% admitted to having made a significant mistake because they lacked a particular skill, while 62% said it wasn’t possible to be skilled in every area of their business. Furthermore, 28% of respondents reported feeling overworked, with 45% admitting to working on weekends.

Why should you care?

The challenge of wearing multiple hats isn’t new, with over a third of respondents taking on extra work due to staff being on furlough (36%), sick leave (36%) and maternity leave (35%). But with the cost of living continuing to climb and the UK’s employment crisis predicted to last for another 3-5 years, it’s important that businesses learn to cope with staffing gaps.

So what solutions are out there for small business owners who have found themselves stretched across different roles?

One option is to hire freelancers for a specific project or limited time period. Because freelancers are usually paid based on day rates, they can provide businesses with much-needed support, skills and knowledge without a commitment to permanent contracts, annual salaries or employee benefits.

Another option is to look for ways to upskill people within the business – whether that’s staff or owners themselves. This could be mutually beneficial for both employers and employees, with 4 in 5 workers saying they’re highly interested in learning new skills.