New Government Energy Bills Discount Scheme: industry reaction
The Government has announced the introduction of an Energy Bills Discount Scheme from March 31, 2023, to March 2024 – replacing the current discount system for gas and electricity unit prices.
The new Energy Bills Discount scheme will give businesses with an energy contract discounts on wholesale prices of up to £6.97 per megawatt an hour for electricity and £19.61 per megawatt an hour for gas.
This is much less than the current discount which the Government said is because wholesale energy costs have fallen back to where they were just before Russia’s invasion of Ukraine and almost halved since the current scheme was announced.
Businesses will receive the discount automatically. The Government estimated that a typical pub will save £2,300 off its annual bill and a small retailer will save around £400.
The discount will only come into effect when gas prices are more than £107 per MWh for gas and £302 per MWh for electricity. Businesses that fall under this threshold will not get any further support for their energy bills.
Responding to the announcement, Richard Lambert, NHBF chief executive said: “We are relieved that the Government has answered our call and that the hair and beauty sector will at least receive some support via the Energy Bills Discount Scheme. However, many will see the discount swallowed up in the first month or two of the energy price increases they are already facing.
“Energy costs are the first or second largest outgoing for most hair and beauty salons and barbershops and it remains to be seen whether this reduced support will help many keep the doors open and lights on beyond March 2023.
"Our sector is locked in a fight for survival through the cost of doing business crisis and with 20% of businesses saying that they are likely to downsize or close over the next few months, further support will be needed to ensure that this sector can continue to make its significant contribution to vibrant high streets and community wellbeing.”
Victoria Brownlie, chief policy officer at the British Beauty Council, added: "There can be no debate that businesses within the beauty industry are having a really difficult time at the moment with the price of energy, products, rents and supply chain costs and increasing significantly in 2022.
"Whilst we are grateful to receive some level of continued support post March, it is disappointing that the Government has not gone further at such a delicate time for our hair and beauty salons and retail businesses.
"We are continuing to push for discounts, grants and incentives across other areas of business. These include green grants and funding to implement energy efficiency measures, to help rebuild and futureproof the industry."