Business Energy Support Plan
Originally announced within days of the new Prime Minister’s appointment, we now have more detail around the Business Energy Support plan, as follows:
- The scheme fixes wholesale gas and electric prices for all non-domestic energy customers for six months from 1st October in England, Scotland and Wales. A scheme offering comparable support will be established in Northern Ireland.
- The scheme will be reviewed after three months. At this point, ‘vulnerable’ businesses may receive support beyond March 2023. At this stage there is no definition of ‘Vulnerable’ organisations, though it is expected that these will include those in the hospitality sector such as pubs and restaurants.
- Expected costs are £211 per MWh for electricity and £75 per MWh for gas, before standing charges and other such additions.
- Businesses entering fixed tariffs since 1st April 2022 will be included, as will those on variable and flexible tariffs.
- The discount will be applied to costs automatically from 1st October, though they may take until the 1st November to appear on bills.
- Landlords will be subject to new laws that ensure the discount is passed on to ‘all-inclusive’ tenants.
Early responses are mixed.
There is relief that what is seen as ‘a lifeline’ has been provided to businesses, but six months isn’t that long! Many businesses may still need to drastically cut overheads, investment and staff numbers to be sure they can survive beyond this timescale, given the planning required to make changes of this nature.
Planning any pricing strategy for the new year is going to be impossible without some additional certainty, particular if there is a need to fix prices for a period of time.
We’ll wait to see what the planned ‘mini-budget’ brings later in the week. As always, as soon as we’ve heard the Chancellor’s announcements we’ll start work on a summary for you and it will drop into our clients’ inboxes as quickly as we can get it there. If you’d like to receive your own copy, just add your details below, and we’ll make that happen.
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