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Energy support extension revealed for businesses

Published:  12 October, 2022

The industry has welcomed the news that government will expand its help for businesses with their energy bills, with subsidies set to cover contracts going back to December 2021.

The expanded scheme is an extension of the subsidy announced by Prime Minister Liz Truss back in early September, when it was announced that UK households and businesses would be receiving government help with their energy bills.

At the time, businesses were told they would have had to have their latest energy deal signed after 1 April to be eligible – even though price rises began months earlier.

Now, businesses which signed expensive deals in the first quarter of the year, in the aftermath of Russia’s invasion of Ukraine, are set to benefit.

In response, UKHospitality chief executive Kate Nicholls said the intervention was “extremely welcome”, and praised the decision to expand the scheme to include operators on fixed price contracts agreed from 1 December 2021.

“This has avoided unfairly penalising businesses who had acted early to protect themselves from further price hikes. The publication of wholesale energy prices will also provide much-needed clarity for businesses…who are facing soaring energy costs this winter,” she said.

Nicholls added a note of warning, however.

“Unfortunately, the reality of this crisis means that, even with this support, energy bills will still be much higher than last year, and many hospitality businesses will struggle to make it through to next spring. What the sector really needs now is the introduction of longer-term measures that can allow us to boost economic growth, namely a lower rate of VAT and further business rates relief,” she said.

The Energy Prices Bill is set to be officially introduced in Parliament today (12 October), thus passing the support package into legislation.

Businesses will receive a portion of their energy costs for six months, with a cap set at £2,500 from October. Households will receive support for a longer term of two years, though the government is said to be considering an extension for energy-intensive sectors.