UK Government support for business on energy bills welcome but uncertainty remains on whether it will avert long-term risks to economy
The Secretary of State for Business, Energy and Industrial Strategy (BEIS) has announced further details on measures to support business, charities, and public sector organisations such as schools in the face of soaring rising energy prices. The Energy Bill Relief Scheme builds on the recent announcement made by the Prime Minister in relation to the Energy Price Guarantee which set out in more detail the protection offered to households.
In his address, the Secretary of State Jacob Rees-Mogg MP announced the following:
- Wholesale prices will be fixed for all non-domestic energy customers at 21.1p per kWh for electricity and 7.5p per KWh for gas. The Government Supported Wholesale Price is less than half of expected prices this winter.
- The support will take effect from 1 October 2022 for six months and apply to all businesses.
- Any further support announced in March 2023 will be informed by a review of the scheme in three months’ time.
Responding to this announcement, the Centre for Energy Policy’s Deputy Director, Jamie Stewart said:
“This plan offers some further reassurance for UK businesses as well as charities, and public sector organisations such as schools going into this winter. The Government Supported Wholesale Price will hopefully reduce the immediate risk of business collapse and job losses. It should also limit the need for businesses to pass on costs through putting up prices on their goods and services and compounding already acute cost-of-living pressures."
“However, businesses, as well as other organisations, require more long-term certainty so they can plan and manage their costs and operations effectively, sustain jobs and competitiveness, and ultimately contribute to the UK Government’s commitment to achieving economic growth.”
“In order to do this further efforts must be focussed on securing sustainable and affordable energy supplies, including reviewing how the energy market is regulated and how prices are set. Without this, extremely high energy prices could continue to fuel inflation and drive cost-of-living pressures, which risk damaging the long-term sustainability of the economy.”
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