London, UK: Support for businesses energy bills is to be reduced from April, the government has confirmed.
The new Energy Bill Discount Scheme will reduce not cap energy costs for businesses and will last until the end of March next year.
Firms will get a discount on wholesale prices and those paying under a certain price for their energy wholesale will not get support.
The new scheme will run until the end of March 2024. Wholesale gas prices are now below the level they were before Russia’s invasion of Ukraine, but still three to four times higher than their long-term average.
In its announcement, the government said it was scaling back the energy subsidies for the next financial year to £5.5bn. Bills will automatically be deducted by up to £6.97 per megawatt hour (MWh) for gas bills and up to £19.61 per MWh for electricity bills.
Businesses can only benefit from the scheme when electricity and gas bills are high. Only when prices reach £107 per MWh for gas and £302 per MWh for electricity or higher will companies receive discounts.
The current scheme had been described as “unsustainably expensive” and was predicted to cost about £18.4bn, according to official forecasters. Chancellor Jeremy Hunt said: “My top priority is tackling the rising cost of living – something that both families and businesses are struggling with. “That means taking difficult decisions to bring down inflation while giving as much support to families and business as we are able.”
