Voice of America
21 Sep 2022, 18:06 GMT+10
LONDON - Britain pledged on Wednesday to cap wholesale electricity and gas costs for businesses at less than half the market rate from next month, helping relieve the pressure of soaring energy costs but adding to the government's fast-rising spending.
Wholesale prices for electricity will be capped at about 211 pounds ($239) per megawatt hour (MWh) and for gas at 75 pounds per MWh, compared to forecast market rates of 600 pounds and 180 pounds respectively.
'We have stepped in to stop businesses collapsing, protect jobs and limit inflation,' finance minister Kwasi Kwarteng said.
Wholesale gas and electricity prices in Europe surged after Russia invaded Ukraine and have remained volatile since.
Groups representing businesses from pubs to steelmakers welcomed the intervention, saying the government had thrown a lifeline to companies battling to survive.
The government did not publish any estimate of the cost, but reports have put the price of six months of support at up to 42 billion pounds, on top of more than 100 billion pounds for a previously announced scheme to help households.
The final unit prices will be confirmed on Sept. 30.
Suppliers will be compensated for the reduction in wholesale gas and electricity unit prices that they are passing onto non-domestic customers, the government said.
After weeks of political stasis while the governing Conservative Party elected a new leader and the country mourned the death of Queen Elizabeth, Kwarteng is due to give a fiscal statement on Friday.
This is expected to set out some detail on how he will pay for the energy scheme while at the same time delivering on promises to cut taxes, although the total cost of the energy scheme will depend on market prices over the coming months.
Investors say Friday's statement will be a critical test of confidence in British public finances as borrowing costs rise at the same time as a commitment to higher spending and banking on accelerated economic growth to pay for it.
Kwarteng said on Wednesday he had pledged to get debt down in the medium term, but it was 'absolutely right' to help families and businesses in the face of a major economic shock.
The business energy scheme will initially apply from Oct. 1 to Mar. 31, 2023, for all non-domestic energy users, including charities and the public sector such as schools and hospitals as well as businesses.
The government also announced support for households in Northern Ireland on the same level as the equivalent scheme in the rest of the United Kingdom.
Get a daily dose of Northern Ireland News news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Northern Ireland News.
More InformationFRANKLIN, Tennessee: Hundreds of thousands of Nissan and Infiniti vehicles are being recalled across the United States due to a potential...
REDMOND, Washington: Microsoft is the latest tech giant to announce significant job cuts, as the financial strain of building next-generation...
LONDON UK - U.S. stock markets were closed on Friday for Independence Day. Global Forex Markets Wrap Up Friday with Greeback Comeback...
SANTA CLARA, California: Nvidia came within a whisker of making financial history on July 3, briefly surpassing Apple's all-time market...
SACRAMENTO, California: California's multibillion-dollar farms are facing a growing crisis—not from drought or pests, but from a sudden...
WASHINGTON, D.C.: President Donald Trump says the United States could soon reach a trade deal with India. He believes this deal would...
MADRID, Spain: Liverpool footballer Diogo Jota and his younger brother, André Silva, have died in a car accident in Spain. Spanish...
LONDON, U.K.: An unrelenting heatwave sweeping across Europe has pushed early summer temperatures to historic highs, triggering deadly...
President Donald Trump's plans to build a space-based Golden Dome missile defense shield have drawn immediate criticism from China,...
NEW YORK CITY, New York: Paramount has agreed to pay US$16 million to settle a lawsuit brought by U.S. President Donald Trump over...
LONDON, U.K.: British Prime Minister Keir Starmer won a vote in Parliament this week to move ahead with changes to the country's welfare...
WASHINGTON, D.C.: President Donald Trump will meet Israeli Prime Minister Benjamin Netanyahu at the White House on Monday. President...