Government postpones decision on extending energy bill support for businesses

A decision on whether a government scheme that provides businesses with a discount on energy bills will be extended has been delayed until January.

Amid soaring prices for gas and electricity, the Energy Bill Relief Scheme reduces businesses' bills by around half until March 2023. It caps the wholesale cost of energy for non-domestic customers at £211 per MWh for electricity and £75 per MWh for gas.

The government originally said a decision on continuing support beyond March would be announced by 31 December.

That pledge was confirmed by business minister Nusrat Ghani in a written answer to a question this Monday, but the Treasury now says the decision will not be revealed until the new year.

A Treasury spokesperson said:

"We are protecting businesses from high energy costs this winter, caused by Putin's invasion of Ukraine, through the six-month £18bn Energy Bill Relief Scheme.

"However, this is very expensive, and we need to ensure longer-term affordability and value for money for the taxpayer."

"That is why we are currently carrying out a review with the aim of reducing the public finances' exposure to volatile international energy prices from April 2023. We will announce the outcome of this review in the new year to ensure businesses have sufficient certainty about future support before the current scheme ends in March 2023."

Business groups had called on the government to confirm the level of support before Christmas to provide certainty to businesses. They reacted angrily to the decision to delay the announcement.

Hospitality operators have also accused energy suppliers of "deliberately profiteering" from the energy crisis despite the government support.

Emma Jones, founder of Enterprise Nation, said:

"It's disappointing there will be no clarity on energy support until the new year. That makes budgeting even more difficult for small businesses, many of which are operating on the very slimmest of margins as it is.

"We hope the government will announce its support at the earliest opportunity as firms put their new year plans into action."

Which businesses will continue to get energy bill help?

The government originally hinted that the Energy Bill Relief Scheme would only stay in place after March for the most vulnerable sectors such as hospitality and manufacturing.

However, The Times reported that prime minister Rishi Sunak is considering extending the support for all businesses, albeit with a less generous package, alongside top-up subsidies with additional funding for energy-intensive industries.

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