Energy scheme provides short-term relief for foodservice firms

The UK government has introduced an energy bill relief scheme that will provide a discount on wholesale gas and electricity prices for all non-domestic customers whose current gas and electricity prices have been significantly inflated in light of global energy prices.

UKHospitality CEO Kate Nicholls said she was “relieved” to hear the news. “We particularly welcome its inclusiveness – from the smallest companies to the largest – all of which combine to provide a huge number of jobs, which are now much more secure.”

Schools, hospitals, charities and businesses are all included in the scheme, which will automatically apply discounts to bills. The level of price reduction for each business will vary depending on their contract type and circumstances. 

Attention has already turned to the details of the scheme and its short lifespan – it will run for six months from October. In the coming days, businesses will be crunching the numbers to see the exact benefits for them.

An example the government offers is a pub using 4MWh of electricity and 16MWh of gas a month and which signed a fixed contract in August 2022; the current monthly energy bill is about £7,000. At the time they signed the contact, wholesale prices for the next six months were expected to be higher than the new government-supported price of £211/MWh for electricity, and £75/MWh for gas, which means they will receive a discount of £3,100 per month, reducing the bill by over 40%.

Hospitality businesses have welcomed the short-term certainty the new scheme provides but attention quickly turned to other support, including a reduction in VAT.

Nicholls said: “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. The levers of reduced VAT and business rates reliefs are still available to the government, and there must also be a comprehensive package to ensure that there is no cliff edge when these measures fall away.”

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