In his first major act as Secretary of State for Business, Energy and Industrial Strategy, Jacob Rees-Mogg has announced a new scheme which aims to steer British business through a tough winter, owing to the gas crisis caused by Russia’s invasion of Ukraine.
The 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). This will apply for six months from 1 October 2022 to 31 March 2023. Deductions will occur automatically.
The new caps will be set at 21.1p per kWh for electricity and 7.5p per kWh for gas. It is estimated that it will cut businesses’ electricity bills by half and gas bills by a quarter. It will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts.
The scheme will affect England, Wales and Scotland. A similar scheme will be developed for Northern Ireland, where energy policy is a devolved matter.
The policy will be reviewed in three months in order to inform potential further support following the conclusion of the six-month scheme. 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.
Chancellor Kwasi Kwarteng 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”.