The U.K. government is developing a plan that would cut business energy costs by about half, bringing them to pay prices similar to those of households per kilowatt-hour, sources with knowledge of the matter told Bloomberg, as the U.K. government new prime minister Liz Truss is trying to limit the economic blow from the energy crisis.
The bailout package would reduce the wholesale price built into business energy contracts to the level charged for households, said Bloomberg’s sources, who spoke on condition of anonymity because the discussions have not yet been made public. This will be a discount of around 50% for businesses that have recently entered into energy supply contracts.
The efforts by the centre-right Conservative Unionist government under its new leader, who succeeded Boris Johnson as prime minister, are part of a £40bn bailout package as Liz Truss tries to tackle the energy crisis it faces to shoot up the operating costs of production units, but also of stores throughout the UK (England, Scotland, Wales, Northern Ireland).
Small businesses in the UK are taking drastic measures to limit their energy consumption, as energy costs have increased in some cases by as much as 10 times.
The UK Department for Business, Energy and Industrial Strategy was not immediately available for comment.
The discount, which is expected to cover the semester starting in October and ending at the end of March, but which could also be extended further in duration, will not be horizontal. Its exact size will depend on where the wholesale price was when the company signed its contract with its chosen energy supplier.
Energy providers will receive rebates for the discounts they make, while these will not apply to other charges beyond the electricity itself, so that there is room for competition between providers.