The UK government will pick up nearly half of the soaring energy bills of British businesses to ensure they do not go bust, ministers have announced.
Business Secretary Jacob Rees-Mogg announced a new Energy Bill Relief Scheme, which will provide a discount on wholesale gas and electricity prices for all non-domestic customers, including all UK businesses, the voluntary sector like charities, and the public sector such as schools and hospitals.
Rees-Mogg said the scheme, which will run from October, will provide businesses and institutions an “equivalent level of support” to the Energy Price Guarantee already put in place for households.
The “supported wholesale price” is expected to be £211 ($239) per megawatt hour (MWh) for electricity and £75 ($85) per MWh for gas.
This is around half the expected wholesale price on the open market, and equivalent to the cap on household energy bills, which will run for two years.
The support scheme for businesses will last for six months, with a review period halfway through.
‘Peace of Mind’
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.”
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.”
Trade groups have welcomed the support, but many worried that it would not be enough or last long enough.
Matthew Fell, chief policy director at the Confederation of British Industry, said, “We welcome government’s quick and decisive action to provide hard-pressed businesses with a substantial short-term fix to a long-term problem.”
Shevaun Haviland, director general of the British Chambers of Commerce, said the six-month support is “not enough to make plans for the future” and “some businesses will still struggle to meet their bills.”
Kate Nicholls, boss of UKHospitality, said businesses will get “some confidence” from the support, but said her organisation “will not relent” in its pursuit of “a more comprehensive package to safeguard businesses and jobs.”
