Government steps in with six month emergency package for businesses
British businesses will be provided with a six-month emergency package of support, which will see their energy bills cut in half from expected levels this winter.
The Government Energy Bill Relief Scheme will provide a discount on wholesale gas and electricity prices for all non-domestic customers.
This includes not just all UK businesses, but also charities and the public sector such as schools and hospitals.
Gas and electricity prices have driven wholesale costs to all time highs, with the conflict in Ukraine escalating fears of supply shortages.
It will apply to fixed contracts agreed on or after 1 April 2022, alongside variable and flexible tariffs and contracts.
The scheme will also provide support for 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.
To administer the support, the Government has set a Supported Wholesale Price – expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices anticipated this winter – which is a discounted price per unit of gas and electricity.
This is equivalent to the wholesale element of the Energy Price Guarantee for households.
It also includes the removal of green levies paid by non-domestic customers who receive support under the scheme.
A parallel scheme will be established in Northern Ireland for businesses operating in the country.
The announcement follows Prime Minister Liz Truss confirming earlier this month that businesses would be provided with equivalent support to households.
Households have been provided with a £150bn package of support, which will see their energy bills frozen for two years.
The Government has not confirmed how the support for businesses will be paid for however there have been multiple media reports taxpayers will be footing the bill, rather than the costs being placed on borrowing.
Business Secretary Jacob Rees-Mogg said: “We have seen an unprecedented rise in energy prices following Putin’s illegal war in Ukraine, which has affected consumers up and down the country and businesses of all sizes.
“The help we are already putting in place will save families money off their bills, and the Government’s plans for businesses, charities and public sector organisations will give them the equivalent level of support.
“This, alongside the measures we are taking to boost the amount of domestic energy we produce to improve both energy security and supply, will increase growth, protect jobs and support families with their cost of living this winter.”