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Business Secretary Jacob Rees-Mogg Says Energy Bill Offers "Huge Support" For Businesses

Business Secretary Jacob Rees-Mogg Says Energy Bill Offers 'Huge Support' For Businesses

Business Secretary Jacob Rees-Mogg Says Energy Bill Help "Huge Support" For Businesses (Alamy)

4 min read

Business Secretary Jacob Rees-Mogg has said the government's energy support for businesses will offer a “huge support” for firms facing dramatically increased energy bills this winter.

In an announcement on Wednesday, the Department for Business, Energy and Industrial Strategy (BEIS) said plans could mean that businesses will be faced with bills of “less than half the wholesale prices anticipated this winter.”

But Rees-Mogg could not yet give a figure for how much the overall scheme would cost indicating only that it would be in the range of “many billions” of pounds.

Public sector organisations such as schools and hospitals will also benefit from the new supported wholesale price, which officials expect to be £211 per MWh for electricity and £75 per MWh for gas. 

This is “less than half the wholesale prices anticipated this winter,” according to the information released by the BEIS this morning. 

The relief scheme covers all non-domestic settings and will initially run for six months. A review  will be published in three months time will help inform how support could continue after March 2023, and will look to identify vulnerable sectors and how they can still be helped. 

“It's a huge support for business to ensure that they can cope with the rising price of energy that's essentially from Putin's war,” Rees-Mogg told broadcasters shorly after the announcement. 

The Business Secretary insisted there was a "difficulty" in providing a final costing for the measures, given the likely volatility of energy prices in the coming months. 

"That's very difficult to forecast, so I can't give you an absolute cost," he continued. 

“But we are talking about many billions of pounds.” 

The plans will be underpinned by emergency legislation that will be brought to the House of Commons after the recess for party conferences next month. 

The proposals initially seemed more restrained than Prime Minister Liz Truss indicated in New York yesterday, where she promised support for longer than six months for those who are the most susceptible to the high prices.

"We will make sure businesses are protected from those very high prices that were being predicted and what I can say is that for businesses that are vulnerable, who don't have the wherewithal to invest in their own energy supply, we will be providing support in the longer term,” she told ITV News.

Announcing the package this morning, Truss said: “I understand the huge pressure businesses, charities and public sector organisations are facing with their energy bills, which is why we are taking immediate action to support them over the winter and protect jobs and livelihoods. 

“As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind.

“At the same time, we are boosting Britain’s homegrown energy supply so we fix the root cause of the issues we are facing and ensure greater energy security for us all.”

In the announcement, Business Secretary Jacob Rees-Mogg added: "The help we are already putting in place will save families money off their bills, and the government’s plans for businesses, charities and public sector organisations will give them the equivalent level of support.

"This, alongside the measures we are taking to boost the amount of domestic energy we produce to improve both energy security and supply, will increase growth, protect jobs and support families with their cost of living this winter.”

Ahead of the announcement, a number of hospitality groups told PoliticsHome they wanted not only more “clarity” from government, but to be granted support for longer than six months and some acknowledgement that companies have already been paying increased bills for the past few months which has led to many closures or staff layoffs.

Labour's shadow business secretary Jonathan Reynolds said it is "farcical that the Tories have been unable to tell businesses at the sharp end of the energy crisis what they plan to do to help them until now". 

“Businesses have been crying out for detail on these plans and, even now, there are still questions about how much this will cost and who will pay for it," he added.

"We have known a crisis of this scale has been coming for months and Conservative dither and delay has forced too many businesses to close, with the future still looking bleak."

Business, Energy and Industrial Strategy Committee Chair Darren Jones said, “Capping the price for all businesses is a waste of taxpayers’ money, which should be targeted at those which need it the most.

"Why should British taxpayers collectively get into even more debt to hand over public funds to Amazon?”

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