The Government announced its plans yesterday (9 January) to substantially reduce the level of energy support businesses receive.
Wholesale gas and electricity prices are currently fixed for all non-domestic customers under the Government's Energy Bill Relief Scheme, but this now set to be replaced from the beginning of April by a scaled back Energy Bills Discount Scheme that will see firms get a discount on wholesale prices rather than costs being capped.
Eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill under the new scheme.
However, a 'substantially higher' level of support will be provided to businesses in sectors identified as 'being the most energy and trade intensive', which will include breweries and food manufactures.
Businesses in scope will receive a gas and electricity bill discount based on a supported price that will be capped by a maximum unit discount of £40.0/MWh for gas and £89.1/MWh for electricity.
Emma McClarkin, chief executive of the British Beer and Pub Association, welcomed the recognition of breweries as energy and trade intensive, but was ultimately disappointed by the Government's decision to slash energy support.
“We are very disappointed by the Treasury’s announcement which will mean a dramatic drop in extended energy support relief for pubs come April,” she said.
“Whilst the Government has accepted the need for continued energy bill support for another 12 months, the reduction in the level of this support is extremely worrying and comes at a time of acute pressure on pubs.
“We welcome the recognition of breweries as energy and trade intensive and this will help alleviate some of this pressure in our sector, but we have been clear with Government about the continued vulnerability of businesses across our industry and the ongoing challenges pubs and breweries face. We are aware of the pressure that public finances are under, but energy costs are the single biggest threat to the industry right now to once strong healthy businesses.
“Significant price increases will be the last straw for businesses who have been struggling for three years to remain solvent and serving their communities. We urge the Chancellor to continue to work with us in looking at how additional support can be provided to particularly vulnerable businesses across the UK that mean so much to so many but could close because of the energy price crisis.”
The Energy Bills Discount Scheme will run from 1 April 2023 to 31 March 2024.
UKHospitality has warned the new, lower level of support received under the scheme will see a total £4.5bn hike in bills for the sector.
