Jacob Rees-Mogg, business secretary, has revealed plans to help businesses deal with the cost of living crisis.
The government has announced that wholesale energy costs will be reduced by up to half for businesses during winter months.
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 be applicable to energy consumption starting at 1st October 2022 to 31stMarch 2023: The support will be available for six months for all non-domestic energy users (including hotels, restaurants, schools, hospitals, etc.) The support will be automatically applied to customers’ bills.
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The scheme will be similar to the Energy Price Guarantee for households. The plan effectively sets a maximum price for electricity and gas that can be 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 demanded previously a windfall tax for energy generators. This would mean that taxpayers wouldn’t be paying the bill.
Jacob Rees-Mogg, Business Secretary, also stated:
“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 that survived the Covid pandemic are now worried about rising energy costs.
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.”