The Association of Convenience Stores (ACS) has called the government’s new energy support package for businesses “inadequate, poorly targeted and ultimately pointless”.
Late yesterday, the government announced plans for business energy support beyond the current scheme’s expiration in April. A new Energy Bills Discount Scheme (EBDS) will run for 12 months, for eligible businesses in Great Britain and Northern Ireland.
The government said that the relative discount will be applied if wholesale prices are above a certain price threshold. For most non-domestic energy users, these maximum discounts have been set at:
- Electricity – £19.61 per megawatt hour (MWh) with a price threshold of £302 per MWh.
- Gas – £6.97 per MWh with a price threshold of £107 per MWh
“The discount is calculated as the difference between the wholesale price associated with an energy contract and the price threshold,” the government said. “The discount is phased in when the contract’s wholesale price exceeds the floor price, until the total discount per MWh reaches the maximum discount for that fuel.”
ACS chief executive James Lowman said the new package means the government will provide a subsidy to electricity bills of 1.96p per kilowatt hour for all business customers paying over a minimum rate.
He said: “The new package of business support is woefully inadequate. By moving to a subsidy on energy bills, and failing to target specific sectors or those worst affected, the government has spread £5.5bn support over every type of business, the result being a level of subsidy that is ultimately pointless.
“Make no mistake, local shops will go out of business if the government does not rethink its approach before April. Retailers who struck contracts at the peak of the wholesale energy price will still see their bills quadruple even with this meagre support, blowing their commercial model out of the water.”
Meanwhile, the government announced a second tier of support for energy intensive businesses, which includes brewing. These businesses will receive a higher level of support:
- Electricity – £89 per MWh with a price threshold of £185 per MWh
- Gas – £40 per MWh with a price threshold of £99 per MWh
Emma McClarkin, chief executive of the British Beer and Pub Association welcomed the inclusion of breweries in the higher tier. She said the move would “help alleviate some of this pressure in our sector”. However, she expressed concern for pubs.
“We have been clear with the government about the continued vulnerability of businesses across our industry and the ongoing challenges pubs and breweries face. We are aware of the pressure that public finances are under, but energy costs are the single biggest threat to the industry right now to once strong healthy businesses.
“We are very disappointed by the Treasury’s announcement which will mean a dramatic drop in extended energy support relief for pubs come April.”