Businesses across Britain would have nearly half of their soaring energy bills picked up by the government in an effort to ensure they do not go bust, ministers announced on Wednesday.
The wholesale cost of gas and electricity would be slashed for companies under a scheme that would run for six months starting in October.
The government would cap the wholesale price paid by non-domestic customers, which includes schools and charities.
The supported wholesale price was expected to be 211 pounds ($240.74) per megawatt-hour (MWh) for electricity and 75 pounds per MWh for gas.
This is around half the expected wholesale price on the open market, and equivalent to the cap on household energy bills that would be set this October and run for two years.
Chancellor of the Exchequer Kwasi Kwarteng said: “We have stepped in to stop businesses collapsing, protect jobs and limit inflation.
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“And with our plans to boost home-grown energy supply, we will bring security to the sector, growth to the economy and secure a better deal for consumers.”
The support a business receives will depend on what kind of contract it has with its energy supplier.
Organisations which signed fixed-price energy deals on or before April 1, this year will see the wholesale part of their bill capped automatically.
Those who entered new fixed-price contracts after October 1, would get the same support.
Companies on default, deemed or variable tariffs would be given a per-unit discount, but the amount of support they can get is limited.
This means that, if the price on wholesale gas and electricity markets keeps soaring, their bills would go beyond those on fixed-price deals.
The government said it was working with suppliers to ensure they offer businesses the opportunity to switch to a fixed contract.
The level of support offered to companies with flexible purchase contracts, which include some of the biggest energy users, would also be capped, the government said.
It said a pub using 4 MWh of electricity and 16 MWh of gas that signed a fixed-price contract in August could see its bill drop from 7,000 pounds to 3,900 pounds as a result.
Kate Nicholls, chief executive of trade body UKHospitality, said the intervention was unprecedented and it was extremely welcome that the government has listened to hospitality businesses facing an uncertain winter.
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“We particularly welcome its inclusiveness from the smallest companies to the largest, all of which combine to provide a huge number of jobs which are now much more secure.”
Companies that are not connected to either the gas or electricity grid would get some kind of equivalent support, although details would be announced later.
The support scheme would last for six months, with a review period halfway through.
The government would try to decide how to continue supporting the most vulnerable businesses after the scheme ends.
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