Business secretary Jacob Rees-Mogg has unveiled plans to help businesses face the cost of living crisis.
Wholesale energy costs for businesses will be cut by up to half of their expected price through the winter months, the government has announced.
The Energy Bill Relief Scheme will mean those on fixed-term contracts, agreed on or after 1 April, will see prices for electricity capped at £211 per megawatt hour (MWh) and £75 per MWh for gas.
It will apply to energy usage from 1st October 2022 to 31st March 2023, running for an initial six-month period for all non-domestic energy users (including shops, hospitality, schools, hospitals etc). The support will be automatically applied to customers’ bills.
The scheme will be equivalent to the Energy Price Guarantee put in place for households. The plan effectively puts a maximum price on the cost of electricity and gas charged to businesses.
It is currently predicted that this scheme would cost the taxpayer around £25bn with the business secretary admitting it would “unquestionably” run to “tens of billions”.
Opposition parties have previously demanded a windfall tax on energy generators, meaning that the taxpayers would not be footing the bill.
Business Secretary Jacob Rees-Mogg also 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.”
The government have been under immense pressure to unveil a plan owing to the sitting time lost to the Queen’s mourning period.
Many businesses who managed to stay afloat during the difficult times of the Covid pandemic face renewed anxieties owing to the rise in energy bill prices.
Prime Minister Liz Truss said the plan will provide “certainty and peace of mind” for businesses who are worried about their energy bills.
She also 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.
We’ll make sure that the most vulnerable businesses, like pubs, like shops, continue to be supported, after that.”
