Energy bills for UK businesses will be cut by around half their predicted level this winter under a huge government support package. The scheme will fix wholesale gas and electricity prices for firms for six months from October 1, shielding businesses from crippling costs.

Hospitals, schools and charities will also get help, the government said. It comes after ministers announced a £150bn plan to help households with their soaring bills for two years.


Industry groups welcomed the package but warned further support may be needed after the winter. It is understood the scheme will be reviewed after three months with an option to extend support for vulnerable businesses - but it is not known what sectors come under the category.

Wholesale prices, which are what suppliers pay for energy in bulk before they distribute it to customers, are expected to be fixed for all non-domestic energy customers at £211 per MWh for electricity and £75 per MWh for gas. Those rates will be the base cost, to which other add-ons, such as standing charges will be added by suppliers.

Independent analysts Cornwall Insight said this marked a 45% discount on wholesale energy prices at the end of last week. The government said the scheme would apply to companies which had agreed fixed deals at higher prices on or after 1 April, when energy bills started to surge.

Those on variable and flexible tariffs will also be eligible. Companies do not need to contact suppliers as the discount will automatically be applied to their bills, with savings seen from October but received from November.

Prime Minister Liz Truss said: “We (the government) understood the huge pressure businesses, charities and public sector organisations are facing with their energy bills.

"As we are doing for consumers, she went on, “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 home-grown energy supply so we fix the root cause of the issues we are facing and ensure greater energy security for us all."

The support will apply to all non-domestic energy customers in England, Scotland and Wales. A scheme offering comparable support will be established in Northern Ireland.

Officials have not said how much the package will cost the taxpayer, as it will depend on what happens to wholesale market prices between October and April, when the support expires. But Cornwall Insight estimates the cost at around £25bn.

Energy-intensive industries, such as steel manufacturing, have warned that businesses could go bust due to their energy costs, which have surged after Russia's invasion of Ukraine. Unlike households, businesses are not covered by an energy price cap, which is the maximum amount a supplier can charge per unit of energy.

It means that non-domestic bills have soared even higher.

The government announced earlier this month that household bills for a typical household would be limited to £2,500 annually until 2024 under a separate scheme.

It also said:

·         New laws would be introduced to ensure landlords passed the discount on to tenants who pay all-inclusive bills.

·         An additional £100 payment will be given to households not able to receive support for their heating costs, such as those not served by the gas grid.