Prime Minister Liz Truss has announced an Energy Price Guarantee for families and businesses to support them with their energy bills.
Under new plans, the Government said a typical UK household will pay no more than £2,500 a year on their energy bill for the next two years from 1st October, through a new Energy Price Guarantee which limits the price suppliers can charge customers for units of gas. This takes account of temporarily removing green levies, worth around £150, from household bills.
This is in addition to the announced £400 energy bills discount for all households. The new guarantee will apply to households in Great Britain, with the same level of support made available to households in Northern Ireland.
A new six-month scheme for businesses and other non-domestic energy users, including charities and public sector organisations, will offer equivalent support as is being provided for consumers.
After this initial six-month scheme, the Government said it will provide ongoing, focused support for vulnerable industries. There will be a review in three months time to consider where this should be targeted.
The British Independent Retailers Association (Bira)’s CEO Andrew Goodacre said: “We welcome the Government intervention announced [yesterday]. Retailers on every high street will welcome any support, but we still have concerns.
“Making the energy rate for businesses the same as consumers still imposes a 300% increase on energy bills for many businesses, and that will still cause hardship for those business owners. We also believe that any review over the next six months should have a broader remit of looking at all business costs. There is limited prospect of prices reducing in six months’ time, and so we cannot afford to see business rates increase in line with inflation just as this business support comes to an end.”
In a survey conducted at the end of August to Bira members, 65% of business owners had said a price rise would force them to reduce the number of staff they had or reduce wages, while 40% were considering limiting opening hours, while 23% were looking to permanently or temporarily close their business once the proposed price hike came in October.
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Making the announcement, Truss said: “Decades of short-term thinking on energy has failed to focus enough on securing supply – with Russia’s war in Ukraine exposing the flaws in our energy security and driving bills higher. I’m ending this once and for all.
“I’m acting immediately so people and businesses are supported over the next two years, with a new Energy Price Guarantee, and tackling the root cause of the issues by boosting domestic energy supply. Extraordinary challenges call for extraordinary measures, ensuring that the United Kingdom is never in this situation again.”