LONDON (AP) – Britain’s government said yesterday it will cap wholesale energy bills for businesses this winter to ensure companies don’t go bust amid soaring energy prices.
Authorities said the government will pick up nearly half of all business energy bills for six months starting October 1 to ensure companies “are able to get through this winter”.
“We’re going to review it after six months. We’ll make sure that the most vulnerable businesses like continue to be supported after that,” said British Prime Minister Liz Truss, who is in New York to attend the United Nations General Assembly.
Treasury chief Kwasi Kwarteng said the government measures would “stop businesses collapsing, protect jobs and limit inflation”.
Officials have not provided details on how much the support package will cost, but it is expected to run to billions of pounds.
The news followed similar measures announced earlier this month to cap domestic energy prices to help millions of people heat their homes amid a cost-of-living crisis.
Spiralling gas and electricity bills, together with steeply rising food costs, have driven inflation in the United Kingdom (UK) to its highest level in decades.
The Bank of England expects the economy to go into a recession next year.
The consumer price index hit 10.1 per cent in July, though it decreased slightly to 9.9 per cent in August. Britons were accustomed for years to an average inflation rate of around two per cent.
The government, which predicted the measures would cut the UK’s soaring inflation rate, is expected to push through emergency legislation for the relief plans once Parliament returns in October.
A British business association said move announcement yesterday would provide a “lifeline” for many businesses.
“This intervention is unprecedented, and it is extremely welcome that government has listened to hospitality businesses facing an uncertain winter,” chief executive of trade body UK Hospitality Kate Nicholls said.
Truss announced a two-year “energy price guarantee” for consumers on September 8 that caps average household bills for heating and electricity at GBP2,500 (USD2,872) a year.
The household average was expected to rise to GBP3,500 (USD4,000) a year beginning in October, an 80 per cent jump from the current average annual bill of GBP1,971 (USD2,236).