Government unveils energy plans for business

A new government support scheme aimed at helping businesses cope with the soaring cost of energy was unveiled today.

The Energy Bill Relief Scheme will offer discounts for all business for six months from October 1.

This support will be equivalent to the Energy Price Guarantee put in place for households. As a result of the intervention, wholesale energy prices for businesses will be capped at “less than half” anticipated winter levels.

The government says 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. It will automatically be applied to their bills.

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.

The new scheme will apply to fixed contracts agreed on or after April 1 and variable and flexible tariffs and contracts.

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

New 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.”

The action has been welcomed by business leaders. Kate Nicholls, chief executive of UKHospitality, said: “This intervention is unprecedented, and it is extremely welcome that government has listened to hospitality businesses facing an uncertain winter.

“We particularly welcome its inclusiveness – from the smallest companies to the largest - all of which combine to provide a huge number of jobs, which are now much more secure.

“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.”

Martin McTague, national chair of the Blackpool headquartered Federation of Small Businesses, said: “With small firms the least able to avoid closure and 16 million employees relying on them, ministers have listened to our community and got this big call right.

“Now it’s up to energy retailers to live up to the high bar set today and make sure this help reaches those on the ground.”

Stephen Phipson chief executive of Make UK, the manufacturers' organisation added: “Government has delivered a scheme which is simple to understand, giving reassurance to the business sector.

“However, as it appears prices will likely remain high for many months to come, industry will need support for a longer period to protect jobs and remain competitive, so the further announcement of a review on future support at the three-month stage is reassuring.

“We hope that this support can be made tangible as quickly as possible and not applied retrospectively at the end of the next quarter.”