The government has announced new support for businesses and public sector organisations facing rising energy bills in Great Britain and Northern Ireland.
The new Energy Bill Relief Scheme 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) whose current gas and electricity prices have been significantly inflated in light of global energy prices. This support will be equivalent to the Energy Price Guarantee put in place for households.
It will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts. It will apply to energy use 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.
The level of price reduction for each business will vary depending on their contract type and circumstances. A review of the operation of the scheme will be published in three months to inform decisions on future support after March 2023. The review will focus in particular on identifying the most vulnerable non-domestic customers and how the government will continue assisting them with energy costs.
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.”
Challenges on many fronts
Kate Nicholls, CEO of UKHospitality CEO, said: “We are relieved that the government has listened to the representations that UKHospitality has stridently delivered, relating to the problems that the sector is experiencing with energy suppliers. This intervention is unprecedented and extremely appreciated as we head into an uncertain winter with numerous challenges on many fronts.
“The inclusiveness of the supports announced – covering businesses small and large – will be extremely beneficial to the sector. A sector that provides a huge number of jobs, many of which are now more secure.
“The government - and the prime minister herself… has singled out the vulnerability that energy costs are inflicting on the hospitality sector. [The] announcement will give businesses some confidence to plan for immediate survival but we will not relent in our pursuit of a more comprehensive package to safeguard businesses and jobs. The levers of reduced VAT and business rates reliefs are still available to the government, and there must also be a comprehensive package to ensure that there is no cliff edge when these measures fall away."
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.
“The package will ease worries about otherwise viable businesses shutting-up shop and smaller companies especially will benefit from the discounted rate.
“Businesses will also want to know more about the exit strategy and what happens when the six-month cap runs out. Working closely with business will be key to successful implementation.
“The long-run solution is to double-down on energy security and to incentivise firms to push ahead with ambitious energy-efficiency programmes to lower demand.”