Exact date businesses will have their energy bills capped as they face rising costs
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BUSINESSES struggling with spiralling energy costs will finally see bills capped from October 1, it has been announced today.
Business Secretary Jacob Rees-Mogg this morning announced the government will freeze wholesale non-domestic energy costs at £211 per MWh for electricity and £75 per MWh for gas.
The support will be equivalent to the energy price guarantee that Liz Truss announced earlier this month, which will see household bills capped at £2,500 for two years.
While homes have always been protected by an energy cap - which is set by Ofgem - until this year there were none for businesses.
Across the UK firms of all sizes have been on their knees pleading for help with sky rocketing bills.
It comes as...
- We revealed the expected money saving measures Kwasi Kwarteng will announce this Friday
- More than 1m people will be paid £100 to tackle the cost of living crisis
- Thousands will get a £400 energy bill payment
- Liz Truss is expected to cut stamp duty in her mini-budget
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Today, Mr Rees-Mogg confirmed a cap will come into place for an initial six months, beginning October 1 this year and ending on 31 March 2023.
The Government Energy Bill Relief Scheme will ensure firms are only paying "less than half the wholesale prices anticipated this winter";.
The freeze will also help out schools, community centres, hospitals and third sector organisations such as charities.
It will apply automatically, so there's no need to contact suppliers.
Read our Mini Budget 2022 live blog for the latest cost of living crisis updates
Businesses and organisations on existing fixed contracts will be eligible for support if the contract was agreed on or after 1 April 2022.
Those on default, deemed or variable tariffs will get a per-unit discount on energy costs, up to a maximum of the difference between the supported price and the average expected wholesale price over the six months the scheme is in place.
Industry chiefs have begged the government to freeze costs while inflation is out of control.
Last month six brewery chiefs even warned that thousands of British pubs will be forced to shut up shop unless an urgent intervention is made.
Commenting on today's big announcement, Mr Rees-Mogg said: “We have seen an unprecedented rise in energy prices following Putin’s illegal war in Ukraine, which has affected consumers up and down the country and businesses of all sizes.
"The help we are already putting in place will save families money off their bills, and the Government’s plans for businesses, charities and public sector organisations will give them the equivalent level of support."
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The PM said: “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.
“As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind."
In the domestic energy sector, bills were set to rise to £3,500 in October and more than £6,000 next April in a terrifying prospect for most homes.
However in a mammoth intervention - which could cost more than furlough - Ms Truss will cap costs from October 1, with the typical family paying no more than £2,500.
Under the plan to freeze wholesale costs ministers estimate a family in a detached house will spend no more than £3,300, a semi-detached £2,650, a bungalow £2,450 and a flat £1,750.
Today ministers confirmed that households that do not benefit directly from the Government's energy price cap will get a £100 cash boost to help pay for heating.
Homes that use heating oil rather than gas will get an additional £100 on top of the £400 bills discount already announced.
On Friday more government interventions will be made to help hard-up Brits beat the cost of living squeeze.
Chancellor Kwasi Kwarteng is set to announce billions of pounds worth of tax cuts in a mammoth effort to grow the economy and crack down on inflation.
What other energy bill help is coming?
In November, a £300 one-off ";Pensioner Cost of Living Payment" will be paid out to eight million households.
It will be given to those who already get the winter fuel payment - which is worth between £100 and £300 for those over state pension age.
Millions of households are in line to get the £150 Warm Home Discount between December and March 2023.
Check if you can get an energy grant
There are plenty of energy grants and schemes open to help you out if you're struggling.
British Gas has recently confirmed that it'll pay its most vulnerable customers grants worth £750 to help with sky-high bills.
The has previously paid struggling households up to £1,500 - and you don't need to be a British Gas customer to apply for this help.
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Ask your supplier what's on offer and how to apply, or check here: