Now is not the time to reduce business energy support
The Horticultural Trades Association (HTA) has expressed concern following the government announcement that energy support for businesses will be reduced from April. The HTA represents 1,500 member businesses from across the UK including garden centres and nursery growers.
Jennifer Pheasey, the HTA’s director of public affairs commented:
“The news that energy bill support for firms is to be reduced from April is a concern, though not entirely a surprise, despite our calls to give businesses greater reassurance in difficult financial times. This will likely be a large reduction in energy support, which is not good news for our members, who are already dealing with high inflation and increases in the cost of doing business. Moreover, other utilities will come under pressure again in the summer if last year’s drought is repeated.
“It is important to remember that a thriving horticulture industry plays a significant role for the economy, in job creation and improving the environment, and offers health and wellbeing benefits.”
Under the new energy support scheme, starting on 1st April, businesses will get a discount on wholesale prices rather than costs being capped, like in the current scheme.
The government’s statement explained:
“As per the current scheme the government will provide a discount on your gas and electricity unit prices. Eligible non-domestic consumers will now receive a per-unit discount to their energy bills during the 12-month period from April 2023 to March 2024, subject to a maximum discount. The relative discount will be applied if wholesale prices are above a certain price threshold. For most non-domestic energy users in Great Britain and Northern Ireland these maximum discounts have been set at:
- electricity – £19.61 per megawatt hour (MWh) with a price threshold of £302 per MWh.
- gas – £6.97 per MWh with a price threshold of £107 per MWh
The discount is calculated as the difference between the wholesale price associated with an energy contract and the price threshold. The discount is phased in when the contract’s wholesale price exceeds the floor price, until the total discount per MWh reaches the maximum discount for that fuel.”