THE Government has announced details of a bumper rescue package to ease the burden of energy bills on businesses.
The measures – announced ahead of a so-called Mini Budget on Friday – include a discount on energy bills funded by taxpayers businesses in Britain and Northern Ireland.
Business Secretary Jacob Rees-Mogg revealed details of Kwasi Kwarteng’s £150bn support package at 9am today, with the Chancelllor saying: “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.”
The new rescue package, which comes into effect from October 1, is thought to apply to all sectors of the economy, with the government cutting costs by subsidising wholesale energy prices charged to business users during the Cost of Living crisis.
Read our Mini Budget 2022 live blog below for the latest…
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Scheme will apply to all non-domestic energy customers
All non-domestic energy customers in England, Scotland and Wales will have the Energy Bill Relief Scheme apply to them.
Northern Ireland will have a parallel scheme, based on the same criteria and offering comparable support.
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Six month cap to end on March 31, 2023
Jacob Rees-Mogg confirmed a cap will come into place for six months, beginning October 1 and ending on 31 March 2023.
It will ensure firms are only paying “less than half the wholesale prices anticipated this winter”.
The freeze will also apply to schools, community centres, hospitals and third sector organisations such as charities.
It will be applied automatically, so there’s no need to contact suppliers.
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Statement from Jacob Rees-Mogg
Revealing the new package, business secretary Jacob Rees-Mogg 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…
“This, alongside the measures we are taking to boost the amount of domestic energy we produce to improve both energy security and supply, will increase growth, protect jobs and support families with their cost of living this winter.”
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‘We have stepped in to stop businesses collapsing’
Chancellor Kwasi Kwarteng says the package has been created to prevent companies collapsing following the cost of living crisis.
He 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.”
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‘It will be equivalent to the scheme for households’
PM Liz Truss said: “We know that businesses are very concerned about the level of their energy bills, that’s why we are putting in place a scheme for business that will be equivalent to the scheme for households, to make sure that businesses are able to get through the winter, we’re going to review it after six months.
“We’ll make sure that the most vulnerable businesses, like pubs, like shops, continue to be supported, after that.”
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How will the support be applied?
The support business will get will be automatically applied to bills so they do not need to take any action.
The government said the support would be equivalent to that given to households.
The government set a discounted price per unit of gas and electricity, expected to be £211 per MWh for electricity and £75 per MWh for gas.
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BREAKING: Government announces business support package
The government’s package of support for businesses has been announced by the government.
The new support applies from 1 October.
This is the same date that energy bills are expected to rise again.
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Kwasi Kwarteng expected to bin Sunak’s NI rise
New Chancellor Kwasi Kwarteng is preparing to scrap Rishi Sunak’s planned NI rise to 25 per cent in Friday’s mini-Budget.
Mr Kwarteng will reverse the National Insurance rise to help struggling workers, and could even knock a penny off income tax.
And he will tear up red tape to unleash the financial sector’s “Big Bang 2.0” including axing the cap on banker bonuses.
He is gambling on an agenda of sweeping tax cuts to revitalise things.
FILE PHOTO: New British Chancellor of the Exchequer Kwasi Kwarteng walks outside Number 10 Downing Street, in London, Britain September 6, 2022. REUTERS/Toby Melville/File Photo -
‘Two thirds of small firms paying more for energy’
Tina McKenzie, policy chair of the Federation of Small Businesses (FSB), said: “Our latest research shows near two-thirds of small firms are paying more for energy this year compared to last year, with two in five seeing double, triple or even higher increases in their bills.
“We hope the energy price guarantee means an equivalent amount of support per unit of energy, to the support which households are receiving.
“It should give businesses some degree of certainty over their energy prices for six months, so they can plan confidently for the winter.”
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Truss suggests PUBS among those covered by longer-term support
Speaking in New York where she is attending the United Nations General Assembly, Liz Truss suggested pubs would be among those covered by the longer-term support.
The Prime Minister told ITV News: “The Business Secretary is conducting a review of exactly which businesses will be included – that review will be completed within three months.
“I can reassure people who own pubs that they are exactly the type of businesses that will get that longer-term support.”
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Industry chiefs urge Government for clarity ahead of statement
Industry chiefs are urging the Government to be clear on the type of help available for businesses.
Kitty Ussher, the chief economist at the Institute of Directors, said businesses would welcome the Government intervention, but said it was essential they were given complete clarity as to how it would operate.
Speaking to Newsnight on Tuesday, Ussher said: “It is essential to have the details because businesses obviously have to be able to plan for the future, not just the next few months but the next few years.”
“If they are unable to have the clarity there is hardly any point making the announcement in the first place.”
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Government plans six-month scheme to help non-domestic energy users
The Government plans a six-month scheme for all non-domestic energy users.
But this will then be replaced with a targeted system focused on the most vulnerable industries.
It comes as predictions show businesses could face a whopping 500% increase in costs.
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What sectors will be covered by the new scheme?
Ministers have said that firms, schools, hospitals, charities and other non-domestic consumers will be covered by the scheme following warnings of the devastating impact on the economy if they fail to act.
The Government has already announced that bills for an average household in England, Scotland and Wales will be capped at £2,500 from October 1 – but while businesses have been promised equivalent support, they have been waiting for details as officials have been drawing up a bespoke scheme.
As businesses have not benefited from the existing energy price cap and are not always able to fix their energy price through fixed deals, many are reporting projected increases in energy costs of more than 500%.
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Jacob Rees-Mogg expected to make statement at 9am
Business Secretary Jacob Rees-Mogg is expected to make a statement at 9am.
The MP will reveal details of a £150bn support package to help businesses with spiralling energy costs.
It comes ahead of a so-called “mini budget” this Friday.
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Liz Truss expected to slash taxes this Friday
Liz Truss wants to turbocharge the economy by slashing taxes – including scrapping the NICs and corporation tax hikes.
She will also announce new ‘investment zones’ – ultra low tax and low regulation areas of the country.
Businesses that move to and invest in these areas will have their levies slashed and be freed from red tape – like overzealous eco rules that can block new development.
