Government to cover half of businesses' energy bills this winter as support plans announced in full

The government has announced a new energy bill relief scheme to cut bills for businesses, charities, and public sector organisations.

The scheme will run for six months, starting from October, and will see the government pick up nearly half of businesses' soaring energy bills. The scheme covers all non-domestic customers, which includes all UK businesses, the voluntary sector like charities, and the public sector such as schools and hospitals, whose current gas and electricity prices have sky-rocketed in the past months.

As with the Energy Price Guarantee for households, customers do not need to take action or apply to the scheme to access the support. Businesses should expect to be paying £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas, which is around half of the expected wholesale price on the open market.

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The level of price reduction for each business will vary depending on their contract type. For customers on fixed-price contracts, if the wholesale element is above the new Government cap, the price per unit will be automatically reduced for the duration of the scheme.

Customers with default, deemed or variable tariffs will receive a per-unit discount up to a maximum of the difference between the Government rate and the average wholesale price over the period – the maximum discount is expected to be around £405 per MWh for electricity and £115 per MWh for gas.

For customers on flexible purchase contracts, typically those with the highest energy needs, the level of reduction will be calculated by suppliers, subject to the same maximum discount.

Chancellor Kwasi Kwarteng said: “We have stepped in to stop