The Government has announced a new ‘Energy Bills Discount Scheme’ for eligible UK companies, charities and the public sector from April, which will include meat, fish and dairy businesses.
The new energy scheme has been announced, ahead of the current scheme ending in March. The new scheme will mean all eligible UK businesses and other non-domestic energy users will receive a discount on high energy bills until 31st March 2024.
The Chancellor of the Exchequer, Jeremy Hunt, said: “My top priority is tackling the rising cost of living – something that both families and businesses are struggling with. That means taking difficult decisions to bring down inflation while giving as much support to families and business as we are able.
“Wholesale energy prices are falling and have now gone back to levels just before Putin’s invasion of Ukraine. But to provide reassurance against the risk of prices rising again we are launching the new Energy Bills Discount Scheme, giving businesses the certainty they need to plan ahead.
“Even though prices are falling, I am concerned this is not being passed on to businesses, so I’ve written to Ofgem asking for an update on whether further action is action is needed to make sure the market is working for businesses.”
The main points from the Treasury statement were:
- Up to £5.5 billion of support between 1st April and 31st March 2024
- Non-domestic customers with a contract with licensed energy supplier automatically compensated: up to £6.97/MWh for gas (price threshold of £302/MWh) and up to £19.61/MWhfor electricity (price threshold £107/MWh)
- Special support for energy and trade intensive users (specifically those in the Energy and Trade Intensive Industries list - this includes meat, fish, dairy and cheese makers) such as major manufacturers: gas and electric bill discount based on a price threshold capped at a maximum unit discount of £40/MWh for gas and £89.10/MWh for electricity. This discount will only apply to 70% of energy volumes and will have to be applied for
- Intensive and trade intensive users will continue to be supported at source based on a price threshold of £99/MWh for gas and £185/MWh for electricity
- This means a typical medium-sized manufacturer would expect to receive nearly £700,000 of direct support over 12 months
- Additional support based on Autumn Statement of £150 for off-grid small and micro businesses powered by oil and large users of oil receiving additional top-up payments.
PTF director, Rod Addy said: "Dairy, meat and fish processors face substantial rises in their energy costs this year, threatening to tip them over into financial difficulties. Consumers are grappling with a cost-of-living crisis, of which energy will continue to be a big driver, causing them to rein in retail spend over Christmas."
He continued: "Wholesale gas prices have reduced, but the market remains vulnerable to developments in the Ukraine war, a cold snap and/or a surge in demand as China eases Covid restrictions. This further Government help for all sizes of business is therefore vital and welcome and provides longer term security. However, the battle to cut inflation must continue to protect businesses’ profits, safeguard food sector investment and guarantee shoppers access to affordable nutritious food.”
This story was originally published on a previous version of the Meat Management website and so there may be some missing images and formatting issues.
