Energy price cap announced to get battered businesses ‘through winter’
Businesses will see their energy bills capped, roughly halving the wholesale prices they can expect to pay, Jacob Rees-Mogg has announced.
The move follows dire warnings about the prospect for companies over the winter as energy prices soar, a recession looms and the cost of living rockets.
It will also help charities, hospitals, schools and the public sector and be astronomically expensive for the taxpayer.
Organisations will hope that the move can stop them from going bust over the winter – but there are concerns about whether consumers will see the benefits of the move.
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.’
A factory boss explained earlier this week that he feared his business would go under after discovering his annual energy bill was set to jump from £900,000 to £6million in October.
Prime Minister Liz Truss said previously that the package will apply from October 1 and will make sure businesses ‘are able to get through the winter’.
Her business and energy secretary Mr Rees-Mogg branded the UK’s energy sector ‘broken’ as he announced the policy.
He added that the Government to extract ‘every ounce’ of oil and gas from the North Sea, in a move which will horrify environmentalists and climate scientists.
Mr Rees-Mogg suggested the plan aimed to make the UK more self-reliant and ‘make sure (Russian President Vladimir) Putin and his like can never hold this country to ransom again’.
The new Energy Bill Relief Scheme will provides a discount on wholesale costs for all non-domestic customers, according to the Government.
It has set a supported wholesale price – expected to be £211 per MWh for electricity and £75 per MWh for gas.
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That is less than half the wholesale prices anticipated this winter.
The scheme will apply to fixed contracts agreed on or after April 1 this year, as well as to deemed, variable and flexible tariffs and contracts.
It will apply to energy usage from October 1 to March 31.
The savings will be first seen in October bills, which are typically received in November.
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