The Government Energy Bill Relief Scheme, announced this morning, will see commercial premises pay less than half the proposed increase from energy companies.
The government has set a Supported Wholesale Price – expected to be £211 per MWh for electricity and £75 per MWh for gas, which it said was “less than half the wholesale prices anticipated this winter” and equivalent to the wholesale element of the Energy Price Guarantee for households.
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 run from 1 October to 31 March 2023, with savings first seen in October bills, which are typically received in November.
Discounts will be automatically applied to bills.
Non-domestic customers on default or variable tariffs will pay reduced bills, but these will still change over time and “may still be subject to price increases”.
In a statement, the Department for Business, Energy & Industrial Strategy said: “This is why the government is working with suppliers to ensure all their customers in England, Scotland and Wales are given the opportunity to switch to a fixed contract/tariff for the duration of the scheme if they wish.”
The scheme will be reviewed in three months “to inform decisions on future support after March 2023”.
“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.”
Prime minister Liz Truss said: “As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind.
Martin McTague, national chair of the Federation of Small Businesses, added: “With small firms the least able to avoid closure and 16 million employees relying on them, ministers have listened to our community and got this big call right.
"Now it’s up to energy retailers to live up to the high bar set today and make sure this help reaches those on the ground.”
The announcement will be the first of three important statements this week.
Thursday will see the Bank of England vote on interest rates, with a move from 1.75% to 2.5% predicted – the highest in 33 years.
Friday will see the government’s mini-Budget, with new chancellor Kwasi Kwarteng spelling out his intentions.
