New energy support package welcomed as 'vital breathing space' for Peterborough businesses

New Government action to slash spiralling energy costs for businesses has been welcomed as offering a ‘vital breathing space’ for Peterborough companies.

Under a hefty support package revealed today (Wednesday), the wholesale price of energy will be cut by about half its predicted level for businesses during the winter.

It means from the start of next month the wholesale price of gas and electricity will be fixed for companies, along with hospitals, schools and charities, at levels last seen in May for the next six months with the discount automatically applied to bills.

The scheme is expected to be reviewed after three months with help then targeted at so-called ‘vulnerable’ industries.

Vic Annells, chief executive of Cambridgeshire Chambers of Commerce, said: “This is a substantial amount of help and is most urgently needed by businesses.

"It will be a significant help to companies and will give a vital breathing space to businesses during a very challenging period.

He said: “I am pleased to see a three months review has been included so we can look at how the scheme is progressing.”

Mr Annells said the scheme would effectively fix prices at their May levels when electricity was at £211 per MWh compared to £600 now and gas at £75 per MWh compared to the current £180 per MWh.

But Mr Annells added: “Despite the Government’s help, I would still urge us all to think about ways we can conserve energy.”

Under a separate scheme, the Government announced earlier this month that households bills will be limited to £2,500 a year until 2024.

It is thought the cost of both schemes will be about £150 billion.

Matthew Fell, of the business organisation, the CBI, said: “We welcome government’s quick action to provide hard-pressed businesses with a substantial short-term fix to a long-term problem.

“The package will ease worries about otherwise viable businesses shutting-up shop and smaller companies will benefit from the discounted rate.

“Businesses will want to know more about the exit strategy and what happens when the six-month cap runs out.

“The long-run solution is to double-down on energy security and to incentivise firms to push ahead with ambitious energy efficiency programmes to lower demand.”