Government Announces new Energy Relief Scheme for Businesses
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Following the announcement in parliament earlier this month that the government would be providing support to help address rising energy costs, the government has today provided clarity on what this means for businesses. The have also published guidance to help explain how the scheme will work.
The government has set a Supported Wholesale Price – expected to be £211 per MWh for electricity and £75 per MWh for gas, which 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 usage from 1 October 2022 to 31 March 2023, with a review after 3 months into possible extension for some sectors. This brings the projected cost to businesses in line with the £2500 cap that was already announced for private households.
The REC previously set out the need for clarity for businesses, and called on government to adopt a 12-month scheme, followed by a review, in our Budget submission which we shared with Treasury earlier this month ahead of this year’s autumn Budget and the fiscal event later this week.
Regarding the confirmation of the government’s plans, Kate Shoesmith Deputy CEO, Recruitment & Employment Confederation said:
“We greatly welcome the government’s Energy Relief Scheme which will cut prices for business as well as other non- domestic organisations for six months. This will provide a much-needed lifeline for many small businesses in particular. Although this is much needed relief, as we have said to the Chancellor, Kwasi Kwarteng in our Budget submission – businesses need longer term stability at a time of economic uncertainty.
“We would encourage the BEIS and Treasury to be thinking ahead to how quickly they can give businesses more guidance on further support to help them plan the cost of goods and services for the next year followed by a review. As ever we want to work with the government to create a growth in the economy.”
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