Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Business energy bill support to be reduced after March, Treasury confirms

by January 10, 2023
January 10, 2023
Business energy bill support to be reduced after March, Treasury confirms

Businesses will receive reduced support for their energy bills from the end of March as the Treasury attempts to cut the cost of compensating for soaring gas and electricity prices, the UK government has confirmed.

James Cartlidge, the exchequer secretary to the Treasury, said on Monday that the government would provide £5.5bn of “transitional support” for businesses over 12 months from 1 April 2023.

Cartlidge said the government’s funding of the Covid vaccine rollout, furlough and support for Ukraine had been “right but all have come at a cost”, adding: “It is not for the government to habitually pay the bills of businesses.”

Under the plan, non-domestic energy customers – including businesses, schools and charities – will automatically receive a discount of £6.97 a megawatt hour for gas and £19.61 a MWh for electricity. Cartlidge said this was the equivalent to a £2,300 saving for a pub, or £400 for a typical small retail store.

Businesses with energy costs below £107 a MWh for gas and £302 a MWh for electricity will not receive support. Representatives of small businesses labelled the move a “huge disappointment” as their support will be drastically reduced.

The new scheme will run until March 2024 to avoid a “cliff-edge” end to support this spring, which businesses had raised concerns about.

The existing scheme, which began in October, capped the unit cost of gas and electricity for all businesses until the end of March. Under the programme, the Treasury funded a discount on non-domestic customers’ bills, covering the difference between wholesale prices and a “government-supported price” of £211 a MWh for electricity and £75 a MWh for gas.

The Treasury has now replaced that scheme with an initiative that offers a discount on wholesale prices rather than a fixed price.

The move mirrors a similar reduction to the energy price guarantee for domestic energy consumers announced by the chancellor, Jeremy Hunt, in November. The EPG originally limited the typical annual household bill to £2,500 but that will be adjusted from April to a limit of £3,000 for a further year.

Major manufacturers with high energy bills, such as steel, glass and ceramic producers, will receive a greater discount, equivalent to £7,000 of support over 12 months.

They are less able to pass on increased costs to their customers because of international competition, the government said, so will receive a discount between the wholesale price of energy and a specific price threshold – £99 a MWh for gas and £185 a MWh for electricity.

Those businesses will receive a discount on 70% of their energy volumes and will be subject to a maximum discount of £40 a MWh for gas and £89.1 a MWh for electricity.

The cost of the business support to the Treasury has been estimated at about £18bn for the six months until the end of March. However, the burden to the public purse will reduce as the scheme becomes less generous and if a recent fall in wholesale gas prices is sustained.

Hunt had been expected to announce the revamp to the scheme in December but the delay has left businesses hanging on to calculate their energy budgets for 2023.

Hunt said on Monday that he had raised concerns with Ofgem, the energy regulator for Great Britain, that discounts were not being passed on by suppliers to customers.

Martin McTague, the national chair of the Federation of Small Businesses, labelled the move a “huge disappointment”. He said: “For those struggling, the discount through the new version of the scheme is not material. Many small firms will not be able to survive on the pennies provided through the new version of the scheme.”

Gareth Stace, the director general of UK Steel, said the scheme offered “some important certainty and stability for steel producers’ production costs during this extremely difficult economic climate”.

He added: “However, there will be concerns that the newly announced support falls short of that of competitor countries, including Germany.”

Tom Thackray, the Confederation of British Industry’s director for decarbonisation policy, said: “It’s unrealistic to think the scheme could stay affordable in its current form but some firms will undoubtedly still find the going hard.”

Separately on Monday, the government laid out proposals to incentivise investment into low-carbon technologies and avoid electricity blackouts.

The revamp of the capacity market – which is designed to ensure there is a reliable electricity supply regardless of the weather – will make it easier to prevent blackouts if intermittent sources of renewable energy are not available.

Read more:
Business energy bill support to be reduced after March, Treasury confirms

0
FacebookTwitterGoogle +Pinterest
previous post
House votes to rescind billions in funding to the IRS in first major majority action with McCarthy as speaker
next post
Britishvolt in rescue talks to save gigafactory project

You may also like

UK’s Crypto Hub Aspirations Stall Due to Regulatory...

September 9, 2024

UK inflation rate holds steady at 6.7%

October 18, 2023

Wazamba Casino Revealed: Our Honest Review on Games...

November 27, 2023

Bringing Alcohol Detox to the Home

October 4, 2022

Warning from Industry Leaders: UK Needs Government Aid...

July 24, 2023

Taxpayers who haven’t settled their bill with HMRC...

July 28, 2025

Treasury delays programme to digitise tax system for...

December 16, 2022

HMRC tax helpline chaos leads MP to seek...

January 10, 2023

P&O Ferries owner reports record-breaking profits after mass...

August 19, 2022

Fraudulent Bounce Back loan application prosecutions – what...

October 25, 2022

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Bill Gates met with Trump to talk ‘importance of US global health programs and health research’: spox

      August 28, 2025
    • Trump asks SCOTUS to uphold freeze on billions in USAID payments

      August 27, 2025
    • Three Years of Sounding the Debt Alarm at Cato and on the Debt Dispatch

      August 27, 2025
    • Trump Administration Rightly Attacks EU Tech Regulations but Tariffs and Censorship at Home Harm Americans 

      August 27, 2025
    • White House demands all Gaza hostages return home ‘this week’ amid stalled talks

      August 27, 2025
    • Bankruptcy, Hell, and Exit Barriers

      August 27, 2025

    Categories

    • Business (8,897)
    • Investing (2,246)
    • Politics (16,502)
    • Stocks (3,228)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved