Businesses will see their energy bills capped to get them ‘through winter’ as part of a new government emergency support package. Under the new Energy Bill Relief Scheme, businesses will be given support for six months to protect them from soaring energy bills until October. Wholesale energy prices will drop by nearly half so businesses can afford to pay their energy bills, Jacob Rees-Mogg announced.
Charities, hospitals, schools and the public sector will face massive discounts on their energy bills in the oncoming months under the scheme. The government will also provide further help to companies in vulnerable industries. Chancellor Kwasi Kwarteng said: “We have stepped in to stop businesses collapsing, protect jobs and limit inflation.
“And with our plans to boost home-grown energy supply, we will bring security to the sector, growth to the economy and secure a better deal for consumers.” The plan will provide reassurance to SMEs facing unaffordable increases in energy bills, with some schools even threatening to turn of the heating or face being unable to pay up.
Prime Minister Liz Truss said previously that the package will apply from October 1 and make sure businesses “are able to get through the winter”. The package will see wholesale prices paid by non-domestic customers capped, in a similar move made to households earlier this year.
Mr Rees-Mogg, the UK’s business and energy secretary, announced the latest support package for businesses but said UK’s energy sector was ‘broken’. He added: “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 business department has announced a “supported wholesale price” expected to be £211 a megawatt hour for electricity and £75 a MWh for gas. The government expects this to be less than half the wholesale prices anticipated this winter. The cap means that electricity prices for business customers will still be about double what they were in October 2021, when the price per megawatt hour was £117, but more than half the forecast winter prices of about £540.
The scheme limits the price suppliers can charge customers for units of gas and electricity. Businesses will not need to take any action, as the discounts will be automatically applied to their bills. The changes will apply to new contracts from 1 October, and to fixed contracts taken out since 1 April.
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.