Cost of living crisis: What have the UK government announced to support businesses with costs today?

Families and businesses across the UK are being strained by the soaring cost of energy bills, and rising inflation.

Today, some policies have been announced to curb the prospects of businesses closing and people being pushed under the poverty line.

It is called the Energy Bill Relief Scheme.

The government announced a £150bn plan to help households with their soaring bills for two years.

Here’s what they are:

Support for businesses

The government pick up nearly half of their soaring energy bills to ensure they do not go bust, ministers have announced.

Wholesale costs for gas and electricity will be slashed for companies under a scheme which will run for six months starting in October.

Chancellor Kwasi Kwarteng said: ‘We have stepped in to stop businesses collapsing, protect jobs and limit inflation.

‘And with our plans to boost home-grown energy supply, we will bring security to the sector, growth to the economy and secure a better deal for consumers.”

The support a business receives will depend on what kind of contract it has with its energy supplier.

Organisations which signed fixed-price energy deals on or before April 1 this year will see the wholesale part of their bill capped automatically.

Those who entered new fixed-price contracts after October 1 will get the same support.

Companies on default, deemed or variable tariffs will be given a per-unit discount, but the amount of support they can get is limited.

This means that if the price on wholesale gas and electricity markets keeps soaring, their bills will go beyond those on fixed-price deals.

The Government said it is working with suppliers to ensure they offer businesses the opportunity to switch to a fixed contract.

The level of support offered to companies with flexible purchase contracts, which include some of the biggest energy users, will also be capped, the Government said.

Will this be extended to other institutions?

The Government will cap the wholesale price paid by non-domestic customers, which include schools and charities.

The “supported wholesale price” is expected to be £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas.

Price fixes apply to both businesses and other institutions such as schools and charities.

This is around half the expected wholesale price on the open market, and equivalent to the cap on household energy bills that will be set this October and run for two years.

What other support has been offered by the government?

Prime minister Lizz Truss announced a typical household bill will be capped at £2,500 annually until 2024.

This support scheme could cost up to £150bn, but an exact figure was not given.

The cap applies to the unit price, in a bid to limit how much typical household bills will rise by.

Household energy bills will vary depending on their gas and electricity usage.

Other measures which have been introduced include a £150 one off payment to those on certain disability benefits.

There is also the £400 Energy Support Scheme

This will be paid to the vast majority of eligible people by October.

Reaction to Energy Bill Relief Scheme

Kate Nicholls, chief executive of UKHospitality, said: ‘This intervention is unprecedented and extremely appreciated as we head into an uncertain winter with numerous challenges on many fronts.

‘The inclusiveness of the supports announced today – covering businesses small and large – will be extremely beneficial to the sector. A sector that provides a huge number of jobs, many of which are now more secure.

‘Today’s announcement will give businesses some confidence to plan for immediate survival but we will not relent in our pursuit of a more comprehensive package to safeguard businesses and jobs.’

Emma McClarkin, chief executive of the British Beer and Pub Association, said the energy support ‘will be a lifeline for many pubs and brewers this winter’.

But she added: ‘Whilst this announcement has helped businesses to breathe an initial sigh of relief as they head into this critical period, more support is needed to tackle the cost of doing business and we need a plan beyond the next six months.

‘Our industry is one of only a few that supports jobs and livelihoods in every single part of the UK, and we have the potential to deliver growth in every single community we serve.

‘On Friday, the Chancellor must take steps to address the cost of doing business, by reducing the tax burden on our sector, allowing pubs and brewers the chance to not only survive this winter, but remain at the heart of local economies and their communities for many years to come.’

The Liberal Democrats have described the Government’s scheme to help cut energy bills for businesses as a “temporary sticking plaster” that comes too late for some small firms.

Lib Dem Treasury spokesperson Sarah Olney said: ‘This temporary sticking plaster comes too late for the many small businesses that already closed their doors for the last time because they couldn’t afford soaring bills.

‘The Conservatives have sat on their hands for months while treasured pubs, cafes and high street shops went to the wall.

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‘This delayed announcement will leave our small businesses, schools and hospitals under a cloud of damaging uncertainty. The Government have no plan beyond these next six months, paralysing businesses who need to make decisions for the long term. Support for high streets and public services should be in place for at least the next year and include measures to improve energy efficiency and cut bills in the long term.

‘The announcement shows the Conservatives have no plan and no understanding of the pressures facing our businesses and public services.’

Labour said the Government’s plans to cut energy bills for businesses has come too late for some firms.

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. Labour has been calling for support since the start of the year.

‘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.

‘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.

‘While the Tories prioritise the profits of oil and gas producers, Labour will always be on the side of business and the jobs they create.’