Government to cap electricity and gas prices for non-domestic users

The new Government Energy Bill Relief Scheme will cut prices for electricity and gas for non-domestic for an ‘initial’ six-month period. The scheme, revealed by the Department for Business, Energy and Industry, will see wholesale prices to be fixed for all non-domestic customers at an expected rate of £211 per MWh for electricity and £75 per MWh for gas for six months.

Paid for by the taxpayer, the support applies 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. The savings will be first seen in October bills, which are typically received in November.

The Government will publish a review into the operation of the scheme in three months to inform decisions on future support after March 2023.

The support - which runs alongside the recently introduced Energy Price Guarantee for households - is in response to spiralling utility bills which looked set to force many hospitality businesses to close. ​​

Insolvencies of pubs, bars and restaurants have increased 59% in the past year,​ ​according to data from the Insolvency Service, amid rocketing energy prices.

High-profile operators and trade bodies have been calling on the Government for support for several months. Earlier this month, a group of hospitality trade bodies penned a joint letter to the Chancellor Kwasi Kwarteng warning that a lack of clarity on energy support could be fatal for businesses.​​

“I understand the huge pressure businesses, charities and public sector organisations are facing with their energy bills, which is why we are taking immediate action to support them over the winter and protect jobs and livelihoods,” 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. At the same time, we are boosting Britain’s homegrown energy supply so we fix the root cause of the issues we are facing and ensure greater energy security for us all.”

Chancellor Kwasi Kwarteng said that the Government had “stepped in to stop businesses collapsing, protect jobs, and limit inflation”.

Trade bodies have broadly welcomed the support, with UKHospitality describing the measures as ‘extremely beneficial to the sector’. 

“We are relieved that the Government has listened to the representations that UKHospitality has stridently delivered, relating to the problems that the sector is experiencing with energy suppliers,” says UKHospitality CEO Kate Nicholls. 

“This intervention is unprecedented and extremely appreciated as we head into an uncertain winter with numerous challenges on many fronts.”