Government announces Energy Price Guarantee for families and businesses while urgently taking action to reform broken energy market

8 September 2022

Prime Minister Liz Truss sets out decisive action to support people and businesses with their energy bills.

Summary

With energy prices climbing, this morning the Government has announced some support for families and businesses through the upcoming winter. The intervention can be summarised as follows:

Help for families:

  • From 1 October, a new, two-year ‚ÄėEnergy Bills Guarantee‚Äô will ensure that the average household in Great Britain will pay no more than ¬£2,500 on its energy bills per annum.
  • This will be paired with both the existing Energy Bill Support Scheme (EBSS), which will provide ¬£400 support to households, and a ¬£150 saving, brought about by a temporary suspension of green levies on energy bills.
  • Based on current energy prices, the three measures above will save the average household ¬£1,000 per year, keeping energy bills close to the current cap level

Help for businesses and other non-domestic energy users:

  • A new six-month scheme will provide equivalent support measure for businesses and other non-domestic energy users, such as churches and schools, aimed at protecting them against rising energy bills.
  • This is a universal offer, which will be available to all businesses that are not on fixed price contracts or have agreed fixed price contracts in recent months.
  • After six months, the Government will provide further support for vulnerable industries, such as hospitality.
  • There will be a three-month review to consider where this should be targeted to make sure those most in need get support.

The Government will provide energy suppliers with the difference between this new lower price, and what energy retailers would charge their customers were this not in place. Schemes previously funded by green levies will also continue to be funded by the Government to ensure the UK’s investment in home-grown, secure renewable technologies continues.

Long term reform to bolster UK energy security:

The Government has committed to:

  • Create a new Energy Supply Taskforce, which has begun negotiations with domestic and international gas and electricity suppliers to agree long-term contracts that reduce the price they charge for energy and increase the security of its supply. They will negotiate with renewable producers to reduce the prices they charge as well. The Taskforce will also drive forward the acceleration of new sources of energy supply from North Sea oil and gas to clean energy like nuclear, wind and solar.
  • HM Treasury¬†are announcing a joint scheme,¬†working¬†with the Bank of England,¬†to address the extraordinary liquidity requirements faced by energy firms operating in UK wholesale gas and electricity markets. The Energy Markets Financing Scheme will¬†enable¬†stability to both energy and financial markets, and the economy, and reduce the eventual cost for businesses and consumers. The scheme will provide short term financial support and will be designed to be used as a last resort.
  • Lift the moratorium on UK shale production
  • Launch a new UK oil and gas licensing round, as early as next week
  • Continue progressing up to 24GW of nuclear by 2050, with Great British Nuclear helping to set direction of getting new nuclear projects online in the UK.
  • Undertake fundamental reforms to the structure and regulation of energy market through recommendations from a new review of the UK Energy Regulation
  • Launch a review of our legally binding net-zero commitments, to ensure that they are being met in an economically efficient way, without placing undue burdens on businesses and consumers.

More information can be found here > Written Ministerial Statement and press release.

This factsheet outlines Energy Price Guarantee support for households, and support for businesses and non-domestic consumers with energy bills.